REPORT OF THE AUDITOR.GENERAL ON COUNTY ASSEMBLY OF MERU FOR THE YEAR ENDED 30 JUNE, 2024



UNSUPPORTED INSURANCE COVER FOR MERU COUNTY ASSEMBLY BUILDING

The statement of receipts and payments reflects use of goods and services amount of Kshs.442,722,997 which includes insurance amount of Kshs.42,319,375 as disclosed in the financial statements. 

Review of records revealed that the insurance amount of Kshs.42,319,375 includes an expenditure of Kshs.586,678 which was paid to an insurance company towards insurance cover for the building which houses the County Assembly offices and plenary. 

Review of records further indicates that the sum assured was Kshs.350,000,000. 

However, valuation report for the building was not provided for audit review.

In addition, title deed as well as land registration number for the land on which the building stands, was also not provided for audit review.

In the circumstances, the ownership of the land, accuracy and completeness of the insurance amount of Kshs.586,678 could not be confirmed.

UNSUPPORTED LEGAL SERVICES

The statement of receipts and payments reflects use of goods and services amount of Kshs.442,722,997 which includes other operating expenses amount of Kshs.63,628,942 as disclosed in the financial statements. 

The other operating expenses amount of Kshs.63,628,942 further includes an expenditure of Kshs.3,000,000 paid to a private law firm for provision of legal services relating to impeachment of the Governor.

However, documentary evidence to confirm that procurement of legal services relating to the impeachment of the Governor had been budgeted for was not provided for audit review. 

This was also contrary to Section 147(l[d ) of the Public Finance Management

Ac t 2012.

BUDGETARY CONTROL AND PERFORMANCE

The statement of comparison of budget and actual amounts reflects final receipts budget and actual on comparable basis of Kshs.1 ,022,378,295 and Kshs.992,314,888 respectively resulting to an under-funding of Kshs.30,063,407 or 3o/o of the budget.

Similarly, the County Assembly spent Kshs.990,343,463 against an actual receipts amount of Kshs.992,314,888 resulting to an under-expenditure of Kshs.1 ,971,425 of the actual amount.

The underfunding and under-utilization delayed the overall performance of the County and may have affected service delivery to the public.

NON-COMPLIANCE WITH LNTEGRATED PAYROLL AND PERSONNEL DATA SYSTEM

REQUIREMENTS

Review of the payroll data provided revealed three (3) Members of the County Assembly did not have payroll numbers though paid a total amount of Kshs.8,679,025, through manual payrolls which is outside the lntegrated Personal Payroll Data (IPPD) payroll system without justification. 

This was contrary to Section 6.3 of the County Financial Accounting and Reporting Manual which indicates that the salaries, allowances and/or arrears of County Assembly employees are to be processed through lntegrated Personal Payroll Data (IPPD).

In the circumstances, the County Assembly was in breach of the law.

NON-COMPLIANCE WITH THE ONE-THIRD OF BASIC SALARY RULE

Review of the payroll for the financial year ended 30 June, 2024 revealed that the County Assembly of Meru had Except for the matter described in the Basis for Qualified Opinion Section of the report, there are no other key audit matters to communicate in the report twenty-six (26) employees whose net pay was below a 113 of their basic pay. 

This was contrary to Section E.13(1)(2) of the County Public Service

Human Resource Manual May, 2013 which states that to ensure that officers do not overcommit their salaries, no salary deduction will be affected beyond two-thirds (213) of an Officer's basic salary and Officers should be cautious when taking credit facilities as this will lead to a reduction on the officer's earning.

LATE REMITTANCE OF PAY AS YOU EARN (PAYE) SALARY DEDUCTIONS

Review of the remittances of statutory deductions revealed that the County Assembly remitted PAYE for May, 2024 and Housing Levy for July, 2023 amounts of

Kshs.9,555,530 and Kshs.1,093,061 respectively beyond the stipulated timeliness, contrary to Section 37(1)of the lncome Tax Act, 2012 states that, an employer paying emoluments to an employee shall deduct therefrom, and account for tax thereon, to such extent and in such manner as may be prescribed.

In the circumstances, Management was in breach of the law.

LACK OF EFFECTIVE AUDIT COMMITTEE

Although the County Assembly had an Audit Committee in place, the Committee held only one meeting in the year under review contrary to Regulation 172(1) of the Public Finance Management (County Governments) Regulations, 2015 which requires the Committee to meet once in every three months. 

Further, the Committee did not carry out its mandate contrary to Regulation 159(2) of the Public Finance Management (County Governments) Regulations, 2015 which states that each year the Audit Committee shall carry out annual review of the independence, performance and competency of the internal audit unit and comment on their effectiveness in the annual report.

LACK OF AN APPROVED STAFF ESTABLISHMENT

During the year, the County Assembly did not have an approved staff establishment. 

The approved staff establishment would have included the determination and creation of the number of offices and the minimum number of salaried positions in the County Assembly as stipulated by Section 26 of the Public Service Commission Act,2017.

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