Unaccounted millions: Auditor-General flags Nairobi Assembly for financial mismanagement

The Nairobi City County Assembly is on the spot after revelations by the Auditor-General that more than Sh905 million could not be accounted for.

In the Financial Year 2022- 2023, Auditor-General Nancy Gathungu pointed out discrepancies with Sh310 million for misclassification of expenditure, Sh279 million for unsupported motor vehicle reimbursements, Sh258 million unaccounted for in unsupported salary advances, Sh36 million for foreign travels and Sh2 million for local travels.

For foreign travel, the audit report states financial statement provided included Sh191.3 million of foreign travel but Sh36 million lacked supporting documents.

"Payment vouchers totalling Sh36.4 million were not supported by relevant documents including, original invitations and approvals, boarding passes, attendance lists," reads the document.

On domestic travel, the Auditor-General noted that out of Sh200.8 million, an amount totalling Sh12 million lacked supporting documents including, original invitations and approvals, boarding passes, attendance lists, conference venue invoices and cash receipts.

"In the circumstances, the accuracy and completeness of the domestic travel and subsistence amount of Sh12 million could not be confirmed," Gathangu stated in the report.

For the Sh258 million unaccounted salary advances, the Auditor-General highlighted that it comprised an outstanding imprest balance of Sh255.9 million and an advances balance of Sh2 million.

In her report, Gathungu highlighted that the assembly did not explain why imprest was not surrendered within seven days after return from fieldwork.

Auditor General Nancy Gathungu. (Photo: OAG)

"In the circumstances, the accuracy of the outstanding imprests and an advance balance of Sh258 million could not be confirmed," she noted.

The assembly was also put on the spot for undisclosed motor vehicle reimbursements.

"In the review of payment details provided revealed that Sh279,703,949 was transferred from the Car and Mortgage Scheme Fund on February 15, 2023, to the Nairobi City County Assembly vehicle reimbursement account. However, the amount was not disclosed in the County financial statement," reads the report.

No disclosure

The Auditor-General also noted that the motor vehicle reimbursement account balance was not disclosed in the financial statements.

For the Sh310 million for misclassification of expenditure, the report reveals that the financial statements and ledgers from the assembly had some items charged into incorrect account codes which could not be confirmed.

Regarding the construction of the Speaker's residence, Gathungu said that despite the significant investment of Sh55.8 million the residence remains unused, raising doubts about the value for money."

The Speaker's residence of the County Assembly of Nairobi City was awarded at a cost of sh55,811,842 and a final completion certificate was issued on August 26, 2021, in respect of the project.

The Nairobi County Assembly during a plenary session on April 4, 2024. (Photo: Maureen Kinyanjui/EV)

During the year under review, an amount of sh2,028,303 was paid to the contractor as the final payment.

"However, a physical inspection conducted on November 10, 2023, revealed that the project was complete but the residence was not in use. In the circumstances, value for money on the expenditure of Sh55.8 million incurred on the construction of the Speaker's residence could not be confirmed," said Gathungu in her report.

In her findings, Gathungu expressed her concern, stating, "The inability to justify these expenditures raises serious questions about financial management within the County Assembly."

The report also highlights the failure of the County Assembly to remit Sh67 million in statutory deductions for Pay as You Earn (Sh64 million) and NHIF deductions (Sh3.5 million), casting doubt on the Assembly's adherence to legal obligations.

The report also flagged irregularities in staff recruitment, with three employees hired without proper documentation or adherence to legal procedures.

The three staff members did not provide vital documents including ethics and anti-corruption reports on the declaration of wealth and liabilities on the first appointment.

"Their academic certificates were not submitted to Kenya National Qualification Authority for validation and authentication. In the circumstances, it was not possible to establish how the three were introduced in the payroll without documents," reads the report.

The Auditor-General also noted that the Nairobi County Assembly breached the law in the employment of partisan staff after they hired 200 against the set limit of 144.