Nyanza counties could lose billions of shillings through wastage and misappropriation because they lack effective internal control systems, a recent report has shown.
According to Auditor General Nancy Gathungu’s 2022/2023 report, Siaya, Kisumu, Kisii, Migori and Homa Bay counties did not have audit committees and frameworks in place to control expenditure.
The Auditor accused the counties of failing to observe common practices of law in financial management as well as procurement.
In Kisumu, the report noted major anomalies in personnel management. The county, according to the report, had two registers; the integrated personnel payroll database with 4,336 staff and a manual roll with 363.
Payments for the 363 were effected outside the integrated payroll system.
It was further revealed that departments were giving reports of 5,554 workers while payrolls reflected 4,696, raising questions over the unexplained variance of 845.
The Auditor General noted that 126 employees were being paid more at their bank accounts than is reflected in the payroll.
Also in question is the payment of arrears totaling Sh11 million to 96 employees whom it was reported were paid twice in the year.
In Kisii, the reports say the county irregularly procured portraits worth Sh1.34 million. “Tender opening, evaluation and inspection and acceptance of delivered goods were done by committees comprising of the same officers without any segregation of duties,” noted the AG.
The audit further shows that Migori County was faulted for buying a Sh23 million automated revenue collection system in 2021/2022 that failed the test of internal controls because the system had not been rolled out in two sub-counties of Nyatike and Kuria West.
As per the recommendation, the county ought to have ensured all revenue streams were subjected to the automated systems, but bus parks and markets were still collecting cash.
The revenue system was also said to be an easy target of cyber-attacks since it was not adequately secured.
It was also noted that the system lacked data backup and was still being hosted by the vendor, and that the county had no direct control, making it difficult to guarantee its integrity and reliability.
In Homa Bay, it was noted that there was no audit committee against the Public Finance Management.
Some of the issues flagged include suspicious voiding of transactions, lack of staff establishment, ICT policy and asset register due to the absence of the committee.
In Siaya, imprests amounting to Sh47.9 million remained outstanding for close to a year and management did not provide any evidence of taking action to recover the monies.
The report also questioned the Sh9.2 million imprest on the eve of the closure of the financial year on June 30, 2023, against the Public Finance Management (County Governments) Regulations.
It was also pointed that the devolved unit was operating without an audit committee and that the internal auditor reported directly to the Governor through the CEC, contrary to the Internal Audit Charter.
The Auditor also noted that the county failed to pay court awards for judgements entered against the Executive amounting to Sh32 million, exposing the county to the risk of additional costs in terms of fines, penalties and interest.
