REPORT OF THE AUDITOR-GENERAL ON COUNTY EXECUTIVE OF VIHIGA FOR THE YEAR ENDED 30 JUNE, 2024


NON-DISCLOSURE OF COMMISSION EARNED FROM PAYROLL SERVICES RENDERED

The statement of receipts and payments reflects total receipts of Kshs.4,963,541,189.

Review of payroll records maintained by the County Executive revealed that service charge/commission amounting to Kshs.4,298,552 was charged for processing payroll deductions for third party institutions but the commission earned was not disclosed in the financial statements as income to the County.

In the circumstances, the accuracy and completeness of the total receipts amount of Kshs.4,963,541,189 could not be confirmed.

TRANSACTIONS IN SYSTEM PAYMENTS BUT NOT PROCESSED IN PAYMENT DETAILS

Analysis of the payment reports processed against the payments made revealed that 516 transactions with a total value of Kshs.314,645,241were paid but not captured in payment details. 

Although Management explained that the payment details were as a result of surrender of imprests by individual staff, direct transfer of funds to departments and donor funded projects payments where payments are made via physical cheques, the payments had not been incorporated into the financial statements amounts.

In the circumstances, the accuracy and completeness of the financial statements for the financial year ended 30 June, 2024 could not be confirmed.

TRANSFER TO OTHER GOVERNMENT AGENCIES

The statement of receipts and payments reflects an amount of Kshs.328,795,971relating to other grants and payments as indicated in Note 5 to the financial statements. Analysis of payment details in IFMIS indicates that, the amount of Kshs.308,760,541 transferred to other entities, differs with the executive's ledger amount of Kshs.370,958,471resulting into an unreconciled difference of Kshs.62,197,930. Reconciliation between the two set of records was not done.

In the circumstances, the completeness and accuracy of other grants and payments could not be confirmed.

AMOUNT DUE FROM THE COUNTY ASSEMBLY

Note 9 indicates transfers due from County Assembly of Kshs.14,000,000. 

Review of records revealed that the County Executive transferred Kshs.38,000,000 to the County Assembly on 25 February,2021 and Kshs.6,000,000 on 23 November,2021 totalling to Kshs.44,000,000 being funds paid from deposit and retention account to bridge a shortfall on county assembly's car loan and mortgage account. 

However, only Kshs.30,000,000 had been refunded as at 30 June,2O24leaving a balance of Kshs.14,000,000.

In the circumstances, the recoverability of the amount advanced to the County Assembly amounting to Kshs.14,000,000 could not be confirmed.

OUTSTANDING SALARY ADVANCES

The financial statements includes salary advances of Kshs.1,950,338, out of which Kshs. 1,775,438 was advanced in the year 2015 and 2017 to 10 members among which four (4) are former staff of the County Executive, one (1) is a current member of staff, one (1) is a former but deceased member of staff, three (3) are current sitting MCAs since they were re-elected while one (1) is a former MCA. No much effort has been made to recover the amounts which are still outstanding with no movement in the current year.

In the circumstances, the recoverability of the accounts receivables - outstanding imprests amounting to Kshs.16,638,638 could not be confirmed.

PENDING BILLS

The statements reflects pending bills of Kshs.1,509,939,483 an increase of Kshs.43,415,589 from the prior year balance of Kshs.1 ,466,523,894.

 Failure to settle bills during the year in which they relate to distorts the financial statements and adversely affects the budgetary provisions to the subsequent year as they form a first charge.

NON-ACHIEVEMENT OF ANNUAL DEVELOPMENT PLAN AND BUDGET TARGETS

Analysis of the Annual Development Plan revealed that the County had proposed new projects valued at Kshs.1,323,000,000. 

However, projects valued at Kshs.749,049,758 were prioritised due to resource constraint with projects valued at Kshs.356,605,652 being completed and paid for during the year. Projects valued at Kshs.392,444,106 were however completed but not paid for. No plausible reason was provided for the failure to pay for the completed projects.

In the circumstances, the County Executive is behind schedule in its implementation of the Annual Development Plan.

IRREGULARITIES IN THE CONSTRUCTION OF A MODERN FUNERAL HOME

The statement of receipts and payments and as indicated in Note 7 to the financial statements reflects acquisition of assets amount of Kshs.863,689,851. 

Included in the amount is Kshs.194,286,976 on the construction of buildings which further includes an amount of Kshs.9,646,688 towards construction of a modern funeral home at the Vihiga County Referral Hospital.

Review of the project file revealed that the contract was signed on 20 February,2021 al a contract price of Kshs.96,593 ,784'for a contract duration of one year from receipt of the commencement order on part of the contractor. On 25 July, 2O22,the contractor sought an extension of the project completion time which was granted on 30 Augusl,2022.

The extension granted was for the period from 1 September, 20221o 30 April, 2024.

As at the time of audit the contractor had been paid cumulative amount of Kshs.94,294,478 or 98% of the total contract sum.

DELAYS IN COMPLETION OF THE GOVERNOR'S AND DEPUTY GOVERNOR'S RESIDENCES

Review of documents revealed that the County Executive paid out Kshs.42,974,171 towards the construction of the Governor's and the Deputy Governor's residences during the year under review. 

As noted in the previous audits, review of the project files revealed that despite the contractor having committed to complete the outstanding works by 27 March, 2024, the works remained incomplete as at the time of audit in November, 2024.

There was no water or electricity connected to the residences. 

In addition, access roads had not been done. 

Further, review of the latest payment certificate No. 8 revealed that the contractor had been paid cumulative amount of Kshs.142,094,694 out of contract sum of Kshs.148,526,625.

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