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Counties lost billions in ‘stalled, ghost projects’

County governments misappropriated billions of shillings for the year ending June 2017  in illegal payments, stalled and ghost projects, Auditor General Edward Ouko has revealed.

For instance, Nairobi County government paid Sh600 million to lawyers but could not explain the scope of work covered by the law firms.

Nyamira sent its deputy governor to the United States to learn how to operate a firefighting machine, spending Sh984,000 in the process.

In his report, Ouko questions the rationale behind sending the deputy governor to the US for training that can be offered locally.

Homa Bay county government bought a specialised plant, machinery and equipment valued at Sh132.8 million and a further Sh3.5 million for supply, delivery and installation of oxygen plant materials to Homa Bay District Hospital but the equipment failed to work.

Ouko observes the oxygen plant supplies were not put to use due to the breakdown of the oxygen production plant at the hospital.

The auditor further says Homa Bay does not have a list of individuals who benefited from car loans and mortgages, hence Sh98 million spent on the items cannot be accounted for.

On Nairobi’s legal costs, Sh592 million were paid outside the Integrated Financial Management Information System (Ifmis).

In total 12 law firms were paid Sh318 million but there is no information on the matters they represented the county government in. Consequently, the validity and propriety of legal fees cannot be confirmed.

The law firms include Momanyi and Associates (Sh93 million), Koceya and Co Advocates (Sh98 million), Kithi and Co (Sh20.4 million) and Rachier and Amollo Advocates (Sh20 million).

Others are Tom Ojienda and Associates (Sh20 million), Wachira Nderitu Ngugi and Co (Sh43 million), Munikah and Co (Sh12.5 million) and Achiola Jaoko and Co (Sh7 million).

In the case of Koceya and Co  Advocates, the law firm was paid Sh83 million but no file was produced for audit review and the case which the firm represented the county was not indicated.

Rachier and Amollo Co were paid Sh95.3 million instead of judgement amount of Sh70.3 million.

Ouko further questions how the county arrived at the fee payable to Kithi and Company Advocates taking into account it had very little to lose and in all material facts the case was a forgery.

Nairobi irregularly paid Sh344. 8 million to 19 firms for collecting garbage in areas they were not prequalified to operate.

Machakos spent Sh42.5 million to instal and commission 250 units of greenhouses at the rate of Sh170,000 each, but there was nothing to show on the ground.

The county made payments worth Sh91.2 million as legal fees to various law firms and charged the amounts to other operating expenses.

However, the payment vouchers together with detailed supporting documents were not provided for audit. “Consequently, the validity and propriety of the expenditure of Sh91 million cannot be confirmed,” says the Auditor General.

In Kajiado, the Executive contracted Tynen Limited to construct a modern library at a cost of Sh119.9 million but a visit to the site last November showed the project had stalled and no works were done in the 2016/17 financial year.

Available records indicate both the contractor and the lead consultant had been paid Sh52 million and Sh12.6 million respectively with the Sh52 million processed against certified amounts of Sh49 million resulting in an unexplained difference of Sh2.8 million.

“In the circumstances, it is not possible to confirm  there was value for money for the project and efficient use of resources given the notable delay in implementation, wrangles and the likely cost overruns that are likely to impact the project negatively, thus affecting service delivery to the public,” reads part of the report.

In Busia, the Executive paid Sh44 million for the construction of a maternity and newborn unit at Busia County Referral Hospital, which was to take 12 months but a review of the project last year revealed it had stalled at 40 per cent completion with Sh31.5 million already paid.

In the approved budget for 2016/17, Sh2.9 billion was allocated to 10 departments for various development projects but failed projects were valued at Sh661.3 million.

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