REPORT OF THE AUDITOR-GENERAL ON NAIROBI CITY COUNTY ASSEMBLY FOR THE YEAR ENDED 30 JUNE, 2024


INACCURACIES IN THE FINANCIAL STATEMENTS

The statement of financial assets and liabilities reflects accounts payable - money owed to Fund account totalling Kshs.63,137,482. 

However, records provided revealed an amount of Kshs.83,241,832 as having been borrowed by the County Assembly from the Fund resulting to an unexplained variance of Kshs.20,104,350.

In the circumstances, the accuracy and completeness of the amount owed to the Fund totalling Kshs.63,137,482 could not be confirmed.

UNSUPPORTED PRIOR YEAR ADJUSTMENTS

The statement of financial assets and liabilities and as disclosed in Note 1 7 to the financial statements reflect prior year adjustments balance of Kshs.329,215,197 and Kshs.257,636,251 for the year 202312024 and the comparative year 202212023 respectively. 

The balances include adjustments for bank account balances, imprest and advances, third party deposits/retention, and salary advances. 

However, there are no records and documentations in support of these adjustments. 

Further, the prior year adjustments should only relate to the comparative year.

In the circumstances, the accuracy and existence of the prior adjusted balance of Kshs.329,215,197 could not be confirmed.

UNSUPPORTED LEGAL EXPENSES

The statement of receipts and payments reflects use of goods and services expenditure of Kshs.853,400,059 as disclosed in the financial statements which includes other operating expenses amounting to Kshs.97,715,716, which further includes an amount of Kshs.62,547,421paid as legal charges to eighteen (18) legal service providers.

However, Management did not provide evidence on how the service providers were identified and selected. Further, during the year under review, the County Assembly paid an amount of Kshs.5,298,000 to two (2) private legal service providers who were not in the prequalified list of suppliers. 

Documentary evidence showing how the legal firms were identified was not provided for review.

In the circumstances, propriety, accuracy and completeness of payment for legal services amounting to Kshs.67,845,421could not be confirmed.

RECEIPT OF GOODS ON EXPIRED LOCAL PURCHASE ORDER

The statement of receipts and payments reflects use of goods and services expenditure of Kshs.853,400,059 as disclosed in Note 5 to the financial statements which includes an expenditure of Kshs.9,307,569 on routine maintenance - other assets. Review of records provided revealed that goods totalling Kshs.2,380,100 relating to supply and delivery of printer, hansard tools and equipment amounting to Kshs.898,110 and supply and delivery of photograpy and printing equipment of Kshs.1,482,000 were received by the County Assembly more than ninety (90) days from the date of issue of the Local Purchase Orders contrary to Regulation 52 of the Public Finance Management (County Governments) Regulations, 2015, which provides that a local purchase order or local service order shall be valid for a period of thirty days from the date of issue.

UNSUPPORTED PROCUREMENT OF BULK SHORT MESSAGE SERVICE (SMS)

The statement of receipts and payments reflects use of goods and services expenditure of Kshs.853,400,059 and as disclosed in the financial statements. 

The amount includes an expenditure of Kshs.1,835,700 on communication, supplies and services which further includes payment of Kshs.200,000 for supply, delivery, installation, configuration and implementation of bulk SMS system. 

As per the procurement plan, this procurement was reserved for the youth. 

Request for quotations were made from three (3) companies and the request for quotation forms required the companies to submit a copy of AGPO certificate. 

However, the award of the tender to a local company was not supported by AGPO certificate.

NON-COMPLIANCE WITH FISCAL RESPONSIBILITY PRINCIPLES

Note 4 to the financial statements reflects compensation of employee's expenditure of Kshs.897,472,012. 

The amount represents approximately 46% of the transfers from CRF of Kshs.1 ,945,015,747 being 11% percentage points over and above the maximum allowed ceiling contrary to Regulation 25(1Xb) of the Public Finance Management

(County Government) Regulations 2015 which requires the expenditure set should not exceed thirty-five (35) percent of the county Government's revenue.

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