Senate committee exposes widespread financial mismanagement in counties
The committee recommends sanctions and surcharges for accounting officers who fail to recover outstanding imprests.
A Senate committee has raised the alarm over financial mismanagement in county governments, revealing widespread issues ranging from fictitious pending bills to missing asset registers.
According to the Senate County Public Accounts Committee, unscrupulous county officials are using these loopholes to siphon public funds, and many are reluctant to produce essential documents for audits when called upon.
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The committee's findings, presented by its chairman Moses Kajwang, highlight several key areas of concern, including inflated wage bills due to ghost workers and the absence of effective audit committees in many counties.
These issues were discussed in a report on the scrutiny of financial audit reports for county executives for the year ending June 30, 2020.
Outstanding pending bills
One of the most pressing issues identified is the accumulation of outstanding pending bills, which some counties have failed to prioritise and settle as required by law.
The committee noted that counties are yet to develop a formula for addressing these long-overdue bills, and instead, they continue incurring new ones.
As a result, the committee has recommended that police should investigate any ineligible pending bills.
"Pending bills declared as ineligible should be forwarded to the Directorate of Criminal Investigation to investigate proper legal action taken against those filing false claims," the report states.
Another critical issue pointed out by the committee is the failure of county officials to account for temporary imprests within the stipulated time frame.
According to the Public Finance Management (County Government) Regulations of 2015, a temporary imprest holder must account for it within seven days after returning to their duty station.
The committee recommends sanctions and surcharges for accounting officers who fail to recover outstanding imprests.
"The committee further recommends sanction and surcharging of accounting officers who fail to recover outstanding imprests in line with Regulation 93(7) of the PFM (County Government) Regulations, 2015," the report adds.
Outdated fixed asset registers
The panel also raised concerns about counties' inability to account for their assets due to missing or outdated fixed asset registers.
This has raised fears that county assets may be in the hands of individuals without proper documentation.
"The county entities should update and present their fixed assets register in the format prescribed by the Public Sector Accounting Standards Board," the committee noted.
In addition, the committee found that many counties have failed to update their valuation rolls, leading to substantial revenue losses.
This is a direct violation of the Valuation for Rating Act, and the committee has urged counties to expedite the update of their valuation rolls to ensure fair collection of rent and rates.
"The committee noted that a number of county executives had not updated their valuation roll as required under Section 3 of the Valuation for Rating Act CAP 266, thus leading to under-collection of rent and rates," the report reads.
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