Nairobi County owes Sh6.3 billion to just four advocates, Auditor General reveals
The figure accounts for 29 per cent of the county’s total pending legal fees of Sh21.4 billion, which in turn represents 11 per cent of the total pending bills owed by the County Executive to various lawyers.
Nairobi County is grappling with a ballooning legal debt of Sh6.3 billion owed to just four advocates, a new report by Auditor General Nancy Gathungu has disclosed.
The figure accounts for 29 per cent of the county’s total pending legal fees of Sh21.4 billion, which in turn represents 11 per cent of the total pending bills owed by the County Executive to various lawyers.
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According to the Auditor General, many of the cases stem from disputes over unpaid claims for goods, works and services completed by contractors, unprocedural termination of employment contracts, irregular procurement processes and poor contract management.
“The judgments entered against the County Executive resulted in a high cost of litigation and interests,” reads the report.
The report further noted that the County Executive had not fully disclosed all pending legal costs.
“The County Attorney explained that the process of assessing the pending bills is ongoing as some of the costs date back to the 1980s,” it adds.
At the time of athe udit, Nairobi County was facing 1,086 ongoing legal cases, resulting in numerous claims linked to its operations. The Auditor General warned that if the contingent liabilities materialise, the county may be forced into a “huge cash outlay which may affect its ability to meet its obligations when they fall due, thus impacting service delivery capacity.”
The report also flagged concerns over case allocation, revealing that 65 cases were handled by only eight advocates, each managing between four and 20 cases.
“Management did not provide an explanation for the criteria used to allocate multiple cases to the eight (8) advocates out of the three hundred and fifty (350) prequalified advocates,” the Auditor General said.
Additionally, the county was hit with interest and penalties in cases that could have been avoided. A review of pending legal bills showed an expenditure of Sh180.7 million in interest and penalties awarded by the High Court to a contractor for non-payment of Sh358.8 million. The amount, accruing interest at 12 per cent commercial rate, arose from a December 20, 2023 judgment over garbage collection and heavy machinery hire services rendered between July 4, 2018 and August 4, 2022.
The report indicates that the contractor had provided services valued at Sh948.9 million between July 5, 2018, and July 4, 2019, of which the county paid Sh590.1 million, leaving Sh358.8 million outstanding. The contractor filed suit on March 3, 2023, seeking Sh539.5 million.
The county also paid Sh24.3 million to 13 employees after the court found they had been unfairly dismissed, with an additional Sh10 million in interest at 12 per cent per annum for delayed payment.
“The costs would have been avoided had Management put in place measures to ensure prompt payments of pending bills. In addition, Management has not provided a payment plan to avoid further escalation of the interest and penalties. In the circumstances, the regularity and value for money on interest and penalties on delayed payments totalling Sh190,792,573 could not be confirmed,” reads the report.
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