How governors channel public funds to secret CoG account

Governors have been funding a secret account operated at their Council of Governors headquarters to hire choppers that have seen some adopt the lives of kings.

To beat the stringent procurement rules that would have exposed them, the county bosses remit excess money to the Council of Governors (CoG), part of which is channelledtowards paying for choppers and funding other excesses.

The Sunday Standard has learnt that out of the Sh250 million that has been under the microscope of auditors and investigators, at least Sh150 million was used to hire choppers.

This is what has enabled the county bosses to crisscross the country like kings in choppers paid for by the taxpayer but shielded from accounting.

At the CoG, which is funded by the taxpayer, the chairman is the only one with the privilege of using choppers while on official duties. The chairman has to log in every trip as official to legally get a chopper at the doorstep.

But governors who also wanted to enjoy the privilege decided to make extra contributions on top of the amount required from them and the difference is wired to the operational accountfrom where they hire choppers.

Cannot be tracked

“At CoG, only the chairman has the privilege of using a chopper while on official duties. This must be logged in as official to be legal. However, governors have been using choppers but the payments cannot be tracked back to their counties,” a source familiar with the operations said.  

The CoG chairman, Turkana Governor Josphat Nanok did not respond to text messages or return calls on the matter.

But another source within CoG said the Ethics and Anti-corruption Commission (EACC) has been investigating the scam and interrogated officers and this has scared the council from commenting before the report is released.

It is not yet clear why the EACC has taken too long to conclude the investigations which should have been a straight forward affair.

“An internal auditor who raised the matter was fired and some of the external ones as well as the EACC officers were compromised,” the source said.

Kakamega Governor Wycliffe Oparanya admitted that the CoGhas indeed been booking choppers for governors but maintained that there should be nothing to worry about if the process was followed as required.

He said it costs about Sh170,000 (1700 dollars) per hour to hire the choppers and counties factor this in their travel budgets.   

“To get the chopper, you send an email to the CEO of the Council of Governors who picks for you the chopper from the list of the prequalified companies and will generate an invoice to be settled by debiting the county account,” Mr Oparanya said. 

He however acknowledged that if any of his colleagues has been doing it below the radar, then they were breaking the law. Mr Oparanya admitted that he has used the service twice and even to attend the funeral of former Nyeri GovernorWahome Gakuru. “We would be called and advised on the costs and a number of governors shared a chopper. There is nothing illegal,” Oparanya said.

By the end of 2017, the CoG had at least four special accounts which were not on the radar on the Auditor General. About nine governors mostly use the services while the others use them on the cover of “doing council of governors work.”

“Such a thing cannot happen unless staff from either finance, procurement or administration are aware,” the source said. One of the staff who we cannot be named for legal reasons has been an employee at the institution since it was founded in 2014.

More money also comes from counties as inter-governmental fees. It is channeled to one of the special purpose accounts. Inter-governmental fees is Sh3 million per county per quarter.

Some of the choppers were hired from a company associated with a former governor. Before counties wire the excess inter-governmental fee, County Secretaries (CS), Heads of Treasury, CEC Treasury, generate the need. When the time comes, the CS informs the governor’s personal assistant who calls the CoG for action.

“The current crop of governors have not been contributing for the choppers but it is something that is important and should be formalised. The funding should come from the national government and not counties,” Nyandarua Governor Francis Kimemia said in phone interview.

Kimemia said the allocation that is given to CoG should be spent on essential services like research and not hiring choppers. The Nyandarua County boss said governors still contribute towards the annual devolution conference but their regime is not sending money for legal issues. CoG was using millions of shillings to pay lawyers, another avenue that was used to siphon money.

“COG is not above board and should be audited like any other institution as new governors we are committed to ensure everything is done above board. There should be value for money,” Mr Kimemia said.

Besides the EACC, counties are also under pressure from the Auditor General Edward Ouko to account for money sent to the CoG.

Mr Ouko has raised queries on books of various devolved units on their decisions to send the CoG millions of shillings despite being funded by the exchequer. The CoG receives about Sh350 million every year.   

The Auditor General says the unaccounted money was paid contrary to Section 37 of the Inter-Governmental Relations Act 2012 which requires that the operational expenses of CoGshould be provided for in the annual estimates of the revenue expenditure of the national government.

For instance, in the financial year review that ended on June 30, auditors discovered Kisumu County Governor Anyang Nyongo’s office paid Sh14.5 million to the CoG kitty.

Nyamira County is said to have made irregular payments of Sh12.5 million which Ouko says were not approved by the County Assembly and the expenditure was not budgeted for.

“The CoG budget is funded by the National Government. Therefore the payment constitutes nugatory expenditure,” states Ouko in his report.

In Vihiga County, no explanation was given to the auditor as to why Governor Wilber Ottichilo’s office contributed Sh2.9 million to the kitty.

“The County Executive paid Sh2,547,453 and Sh4 million to CoG in respect of contribution towards the fourth Annual Devolution Conference and liaison office rent respectively. However, the expenditure had not been budgeted for during the year and further, all expenses on the conference are supposed to be met by the national government,” he says.

Last month, the Senate County public Accounts and Investment Committee, chaired by Senator Moses Kajwang said it will meet CoG chairman, Nanok over the contributions made by counties without legal backing.