County Governments’ officials may have been using defunct local authorities to siphon huge sums of money meant for county development projects.
Controller of Budget Agnes Odhiambo
A new report said a number of county governments continued to operate bank accounts of the defunct local authorities, raising fears they could have been used to divert money from the county governments.
Local authorities ceased to exist when County Governments came into place. A directive was issued on the freezing and closure of their bank accounts by February 28.
A report by the Office of the Controller, however, shows that a total of Sh6.7 billion was sunk in the entities by different counties between March and June.
The report said most of the money was spent on the local authorities without approval from the respective county assemblies. This shows a serious abuse of laid down procedures by county government officials.
Misuse of funds
The report is a review of the county budgets in the quarter between March and June. The Controller of Budget now wants a thorough audit on the bank accounts held by the defunct local authorities to reveal the extent of the abuse.
“We noted that other counties continued to operate the defunct local authority bank accounts despite a directive that all bank accounts be closed or be frozen by February 28, 2013,” noted the report.
“The bank accounts under the defunct Local Authorities were to be frozen and then closed by February 28 as per the directive issued by the Transition Authority. This directive was ignored and public funds were deposited and expended directly at source in total disregard of the law.”
“There is need for an audit of former local authorities’ bank accounts, assets and liabilities passed over to the County governments on March 4, 2013 after the General Election.” According to the Controller of Budget report released Wednesday, 27 counties spent Sh6.7 billion on the now non-existent local authorities.
Of this, only Sh95 million got approval from the Controller of Budget and the county assemblies.
The Sh6.7 billion that was spent on the non-existent entities is almost at par with Sh9.7 billion that the counties spent on the three arms of County Executive, County Assembly and the County Treasury Financial Management.
“The Office of the Controller of Budget noted that the defunct Local Authorities departments spent a total of Sh6.7 billion in disregard of the law out of which only Sh95.3 million had been appropriated by the respective County Assemblies and authorised by the Controller of Budget,” said the report.
High spending
Among the counties that spent the largest sums of money on the local authorities’ accounts include Nairobi (Sh3.4 billion), Mombasa (Sh602 million), Kiambu (Sh513 million) and Uasin Gishu (Sh339 million).
Other counties that spent huge sums of money are Kitui (Sh121 million), Kisumu (Sh210 million), Nyeri (Sh210 million), Meru (Sh206 million), Narok (Sh233 million) and Laikipia (Sh153 million).
During the four months that the county governments have been in place, they saw their revenues decline.
The report shows a consistent per month decline, with the combined revenue collection going down from Sh2.1 billion in March 2013 to a low of Sh1.5 billion in June 2013.
The Controller of Budget attributed this to weak controls that have led to revenue leaks as well as uncertainties.
By Macharia Kamau, The Standard
