MPs want Sh110m liquor licence fees ‘graft’ probed
Homa Bay Governor Gladys Wanga while appearing before the Senate’s County Public Accounts Committee to answer queries raised by the Auditor-General on March 1, 2023.
A Senate watchdog committee has demanded that the anti-graft agency opens investigations into the potential loss of Sh110 million in unremitted liquor licence fees in Homa Bay County.
The Senate County Public Accounts Committee wants officers found culpable in the matter by the Ethics and Anti-Corruption Commission (EACC) to face prosecution.
This follows revelations before the Homa Bay Senator Moses Kajwang’-led committee on Tuesday that the county executive could not explain why it regularly reported nil revenue returns from liquor licence fees.
This is in addition to failing to prepare and remit financial statements from the liquor fees for six years starting from the financial year ending June 30, 2016.
The county government said it has 920 liquor outlets with each paying a fee of Sh20,000 annually, translating to Sh18.4 million. Nonetheless, the county had put its target at Sh1.4 million.
However, since the financial year ended June 2016, only one fiscal year’s financial statement had been audited with the rest not provided for audit. As a result, the audit report stated that the accuracy, completeness and validity of the nil liquor licensing fees reported in the year under review could not be confirmed.
According to the county government, the Homa Bay County Alcoholic Drinks Control Fund was established in 2015 to receive the fees. In the audit report for the financial year ended June 2020, the management of the fund did not prepare or submit for audit the financial statements. In addition, it failed to provide records of bank statements, liquor outlets and licences issued for audit.
Possible millions lost
Raising concern over the management of the Fund, Mr Kajwang’ said the county government could potentially have been losing Sh18.4 million annually for the six years that the fund administrator did not prepare financial statements or provide the documents. He added that the law requires that fund administrators prepare financial statements and therefore individuals who failed to follow the law should be held accountable.
“We are directing the Ethics and Anti-Corruption Commission to take interest in this matter with a view to investigate and subsequently prosecute individuals found culpable,” said Mr Kajwang’.
He added: “This is pure graft. This is brazen theft of public resources where Sh110 million was going to private pockets. We will not shut our eyes and say let bygones be bygones. There must be administrative action against those who were to prepare the statements.”
Senators Samson Cherargei (Nandi), John Methu (Nyandarua) and Okiya Omtatah (Busia) agreed that EACC should take up the matter for investigations and possible prosecution.
Another point of concern was that the liquor fees were being paid and then withdrawn the following day.
Mr Kajwang’ further claimed that the 920 outlets declared were an under-representation.
Governor Gladys Wanga admitted that the list provided by staff under her predecessor was not exhaustive as three municipalities had not been mapped. She said that the county government has the potential of raising Sh30 million every year from liquor fees.
However, Ms Wanga said that since the Homa Bay County Alcoholic Drinks Control Fund is a revolving one, they accounted for the fees in separate financial statements.
She regretted that during the audit, financial statements, bank statements and lists of liquor outlets were not provided to the audit team for verification.
“The invitation of EACC to investigate the matter is welcome. We have also been taking administrative action on other happenings in the county government where currently 15 officers are under disciplinary action,” said Ms Wanga.
