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City Hall on the spot over questionable Sh318million legal fees


City Hall has once again been put on the spot over Sh318 million in questionable legal payments to 12 law firms representing the county without approval documents.

Nairobi County legal department is said to have paid a whopping Sh318.4 million to 12 law firms without adequate documentary evidence to support the payments.

During the 2016/2017 financial year, the department’s legal cost expenses was Sh645.3 million despite an approved budgetary allocation of just Sh105 million for the department.

This represents an extra Sh540.26 million, which is an over-expenditure of 515 percent above the budgetary allocation for the said financial year.

The revelation is part of an ongoing grilling by Nairobi County Assembly Public Accounts Committee (PAC) arising from queries raised by Auditor General Edward Ouko.

EXPENDITURE

The Auditor General’s report indicated that Sh592.4 million in legal fees was paid outside the Integrated Financial Management Information system contrary to the National Treasury directives.

“No authority for the supplementary expenditure was sought from the County Assembly contrary to Section 196 (1) of the Public Finance Management Act, 2012. Consequently, the validity and propriety of legal fees for the year as disclosed in the financial statement cannot be confirmed,” read in part the report.

The report revealed that Momanyi and Associates was paid Sh85 million in a 2011 case pitting the county against Edward Rukaya and two others, Koceyo and Company advocates was paid Sh83 million with the county failing to produce file for audit review while Wachira, Mburu, Mwangi and Company advocates was paid Sh32.37 million in a case between Josmass Enterprises and the county where the plaintiff sued for damages despite evaluation for the tenders not being over yet.

Momanyi firm was again paid Sh8 million in another case, and Koceyo also in two other case got over Sh20 million.

Professor Tom Ojienda and Associates was paid Sh20 million after filing a bill of costs in respect to a High Court Judicial Review of 2014. This is despite the county officials being instructed to hold a meeting to negotiate reduction of the judgment and mode of payment.

HUGE LEGAL FEE

A similar amount was also paid to Rachier and Amollo advocates where the auditor general said that Sh95 million was paid instead of judgment amount of Sh70 million.

Another questionable payment of Sh20.4 million was made to Kithi and Company advocates with the auditor questioning how the county arrived at the huge legal fee although they had very little to lose in the case.

Other payments were to Wachira Nderitu Ngugi and Company advocates paid Sh9 million, Munikah and Company advocates paid Sh12.5 million, and Achola Jaoko and Company advocates paid Sh7 million.

City Hall acting County Attorney David Oseko and Finance chief officer Stephen Mutua were hard-pressed by the committee chaired by Wilfred Odalo to explain how the payments were made.

The committee sought to know why the issue of payment of irregular legal costs has been a recurring issue at the county for the past three financial years.

WARRANTS OF ARRESTS

“It seems that this is a conduit through which some people siphon public funds at the expense of Nairobi residents,” said Mr Odalo.

Last year the same department was on the spot for spending Sh480 million outside the allocated budget of Sh100 million that had been set aside for it during the 2015/2016 financial year.

However, Mr Oseko explained that the payments were necessitated by warrants of arrests and garnishee orders issued to them by the court compelling the department to pay or risk arrests.

“The county had no option but to pay for the costs. Legal costs are very hard to budget for because you do not know when they will come,” said the acting County Attorney.

On the issue of not acting on the recommendations, he said that he was not aware of any recommendations since he was recently appointed to the department asking for more time to present documentary evidence on the payments.

Mr Oseko and Mutua have been ordered to appear before the committee again this week.