City Hall receives report linking Kidero to lost Ksh. 21B

Nairobi City Hall has received the damning audit report that revealed Ksh.21 billion was misappropriated under former Nairobi Governor Evans Kidero.

The county’s previous regime was on Wednesday criticised for not prosecuting those implicated in the scandal.

“Public utility must be respected. We will make sure those found guilty are jailed and repossess all stolen public assets,” Nairobi Finance chief Danvas Makori said while receiving the report on behalf of Governor Mike Sonko.

According to audit firm KPMG, Mr. Kidero operated 32 bank accounts, contrary to the Public Finance Management Act, that requires all county government accounts to be opened at the Central Bank of Kenya except for an Imprest bank account.

“Further, approximately Ksh.21 billion in payment made through these banks were not processed in the Integrated Financial Management Information System (IFMIS) and the county did not maintain adequate accounting records to facilitate scrutiny of the related transactions,” the report noted.

13 of the bank accounts were not declared during the handover to current governor, while five of them were found to have approximately Ksh.120 million as at August 31, 2017 with its signatories being former county officers.

During the audit, KPMG scrutinised the county’s debts and financial standings including procurement, revenue collection, human resources, land, assets and bank accounts.

“County officers could not provide supporting documents for 14 transactions amounting to Sh1.1 billion out of a sample of 60 transactions,” the report said, adding that a majority of cash books of the Nairobi County Government were maintained in manual format, hence, it was not possible to obtain a trial balance or central view of the county financial position.

KPMG noted that the Nairobi County Government used five different financial systems to manage its operation during the period July 1, 2011 to June 30, 2017.

They include eJijipay, an e-payment platform; Laifoms, a revenue receipting systems; IFMIS, hosted by the National Treasury; Integrated Payroll and Personnel Database (IPPD), for staff records and payroll as well as Jumbo Link, an online Cooperative Bank of Kenya link to making payments.

Further, the report indicates that cash collection booklets were subsequently deleted from the county revenue receipting system.

“There was no evidence provided to demonstrate that cash collected by the attendants using the 7,366 booklets was surrendered to the county treasury,” said KPMG Head of Advisory East Africa Gerald Kasimu.

The handover report indicated Ksh.56 billion in liabilities as at June 30, 2017 but the review showed that this amount was incorrect. It recommends an overhaul of the entire county government’s financial system to seal loopholes that .