Nairobi News

Billions of shillings were paid to ghost companies and employees and millions of shillings collected by Nairobi county government were not banked, an audit report revealed on Thursday.

The controller and auditor general’s report revealed that over Sh252 million revenue collected by Nairobi County Council between January 1 and June 30 2013 was not banked.

The report also showed how the county government paid millions to non-incorporated companies and other firms not in the tender prequalified lists, exposing the level of corruption and shadowy deals in the country’s wealthiest county government.

The Senate’s devolution committee chaired by Marakwet Senator Kipchumba Murkomen has now received the audited reports and is expected to question county chiefs over expenditures incurred by devolved units.

A major payroll racket was also exposed by the auditors.

Unsurrendered impressed valued at Sh235 million advanced to various county officers was also queried by the auditors.

“From January 1 2013 to June 30 2013 a total of Sh5.5 billion was collected from various sources but only Sh5.2 billion was banked resulting to under-banking of Sh252 million,” the report said. 

The report further revealed that of the unbanked money, some Sh223 million was paid as cheques to some county employees and later cashed for various direct expenditures, while the remaining Sh29 million was irregularly issued as IOU to various county officers.

Of the Sh60 million collected as cess revenue, only Sh57.8 million was received and banked, while Sh2.8 million was not accounted for.

“Appropriate action should be taken against officers who failed to strictly adhere to the financial regulations and procedures,” the auditor-general recommended. 

The audit further discovered that the city county has been spending money collected from various offenders as bail instead of depositing it in trust accounts pending the determination of the cases.

Over Sh11 million collected from arrested persons as bail ended up being treated as revenue by the county. The cash bails were unavailable for refunds thus exposing the county to litigation by claimants.

Also discovered is a dramatic payroll racket that revealed 47 bank accounts- each being utilised by more than one officer, 121 officers who earned salaries without PIN numbers and 11 officers whose details showed they were hired even before they were born.

Two officers had their salaries irregularly increased, one from Sh15,297 to Sh46,580 while the other was raised from Sh14,925 to Sh42,000.

The county government faces 1,800 cases mostly inherited from the former city council. The cases cost the county Sh1.1 billion.

The report has also captured an incident in which a shadowy lawyer who had not been licensed to practice had filed claims for Sh3.1 billion for loss of property later discovered to be Mariakani Primary School, which is owned by the county government. 

Most of the shadowy dealings occurred way before the current governor Evans Kidero took over the county’s administration.