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EACC probe Sh18 billion revenue siphoning at City Hall

City Hall in Nairobi. 

Photo credit: File

What you need to know:

  • The Sh18 billion was collected by the county government between 2016 and 2019 but was not reported and accounted for by the county executive. 
  • Senior officials at devolved units took advantage of the loopholes in the revenue collection system to siphon the funds.

The anti-corruption watchdog has opened investigations into the misappropriation of funds running into billions of shillings at the Nairobi City County government between 2016 and 2019. 

Among the funds that the Ethics and Anti-Corruption Commission (EACC) is pursuing is a total of Sh18 billion collected by the county government during the said period but was not reported and accounted for by the county executive. 

The investigations come after the Senate Public Accounts Committee completed its interrogation of the Auditor Generals’ financial audit reports for the devolved unit from 2016 to 2020. 

The committee chaired by Homa Bay senator Moses Kajwang has said senior officials at devolved units took advantage of the loopholes in the revenue collection system to siphon the funds during the said period. 

“Sh 18 billion collected from various sources of revenue was not accounted for and reported by the management of the County Executive. 

There are massive loopholes in revenue collection systems resulting in the loss of public funds from the revenue collected. The Senate Committee expressed concerns that the unreported revenue of Sh 18 billion may have been embezzled by senior officials who deliberately failed to report the correct revenue collected by the County government,” read the list of issues forwarded to EACC by the Senate. 

The Sh18 billion includes Sh3.9 billion that was not reported by the county government in 2018/2019, Sh9.6 billion not reported by the county government in 2017/2018 and Sh4.7 billion not reported in 2016/2017.

In 2018/2019, the county collected Sh13.9 billion but only reported Sh10 billion, in 2017/2018, the county collected Sh19 billion but only reported Sh10 billion while in 2016/2017, the county collected Sh15 billion but only reported Sh10 billion. 

The Senate also named a junior officer identified as Samson Kiuu whom was responsible for cash payments and irregular withdrawals of Sh458 million without supporting documents. The officer who used to serve at the cash office is currently still serving at City Hall in a separate department. 

“The Committee raised concerns of the officer and the massive public loss of funds through the officer. It was not clear under what circumstances a cashier was making huge payments running into millions through cash without supporting documents. There is a possibility that he was being used by Senior officials to siphon county funds over time,” read the report. 

Evans Kidero was Governor of Nairobi County between 2013 and 2017 while his predecessor Mike Mbuvi Sonko was governor between 2018 and December 2020.

The commission is also investigating a total of Sh4 million irregular payment of allowance to a total of 33 police officers who were guarding former Nairobi governor Mike Sonko during a Mombasa trip. 

EACC Spokesperson Eric Ngumbi said the loss of public funds due to the automation of revenue collection and management systems is rampant in several devolved units and called upon the counties to develop inbuilt accountability mechanisms. 

 “It is not enough to automate the revenue management systems. It is a matter of the people who are in charge of these systems and whether they have the integrity to audit and interrogate the system.

Without inbuilt accountability mechanisms such as the internal audit committees, detection of the loss of public funds due to automation becomes a big challenge,” Mr Ngumbi told Nation.Africa.