Budget boss rejects City Hall's request for Sh1b to pay legal fees to 19 firms

Auditor General Nancy Gathungu (left) and Controller of Budget Margaret Nyakang'o during the Budget Highlights for FY 23/24 at the Parliament on June 15, 2023. [Elvis Ogina, Standard]

City Hall has suffered a major setback in its bid to clear some pending bills after the office of the Controller of Budget (CoB) declined to approve a request of Sh1 billion for the payment of legal fees.

Controller of Budget Margaret Nyakango rejected a request by Nairobi County's finance department for the release of the Sh1 billion, which was to be transmitted to 19 firms as legal fees, terming the payments as questionable.

The Nairobi County had also sought the approval of Sh378.86 million for expenditure on development but this was also declined.

Pointing out glaring irregularities in the requisitions, the COB is now seeking clarifications.

Nyakango was concerned that the schedule of 19 firms to be paid does not include the invoices' dates and therefore difficult to ascertain whether they are pending bills or related to works done and invoiced in the current financial year.

"...Please, therefore, revise the schedule to include the date of the invoices and attached copies of the payment vouchers for the 19 firms," read a letter dated June 27, 2023 and addressed to Finance and Economic Planning CEC Charles Kerich.

"Please provide clarifications on the above issues to enable my office facilitate the requisitions soonest," it added.

Nyakango poked holes into the requisition, highlighting that the county had not provided the pending bills payment plan which could enable the matching of individual payees to the requisition.

This, she noted, made it difficult to match the proposed payments with the pending bills report earlier presented to her office.

The COB has now asked the county Treasury to provide the basis of the legal fees, the status of each court case including copies of judgements given and the criteria used in the selection of the payments.

Legal firms

She also requested for the submission of the recommended first-in first-out method used be applied in the identification of the bills and information on whether the proposed payment is a part payment or a final payment to the legal firms are also needed.

The development comes against the backdrop of a court case where City Hall has been sued for moving to pay the law firms without indicating the criteria used to identify the firms and for prioritising the same at the expense of other service providers.

In court documents seen by The Standard, Rodney Wesonga and Mwangi Ngatia Advocates claim that City Hall's choice on the list of firms to be paid was shrouded in secrecy and that the process could be discriminatory.

"The applicant has since learnt that the National Treasury is in the process of disbursing some funds to the Nairobi County government for purposes of sorting pending bills and the applicant has further learnt that the first respondent has approved to pay around Sh2 billion to less than 15 law firms.

It is not clear which modality the county used to settle on paying the said 15 law firms and the applicant firm and other firms that have equally provided legal services to the Nairobi County government," read the papers in part.

They exposed that despite several inquiries by their and other applicants, City Hall had remained mum on their decision-making criteria. As of January 2023, it emerged that City Hall owed legal firms Sh21 billion in pending bills while suppliers were owed more than Sh100 billion.

This prompted Governor Johnson Sakaja to form a 14-member taskforce to verify the bills owed to 300 firms.