Siaya County spent Sh285 million on tea, audit report reveals

Cornel Rasanga, James Orengo

Siaya Governor James Orengo (right) and his predecessor Cornel Rasanga.

Photo credit: File | Nation Media Group

What you need to know:

  • The report also revealed rampant abuse of the imprest system.
  • The Ouko-led team said the expenditures were not clear and neither can they be substantiated.

An audit report on the financial operations of Siaya County government has revealed how Sh285 million was spent on tea during seminars while other sectors such as agriculture and education were suffering.

The report by the former Auditor General Mr Edward Ouko also revealed how individuals withdrew more than Sh10 million in one week as food suppliers and extension workers went unpaid for years.

“How can a county government spend Sh285 million on seminars drinking tea while other sectors such as agriculture and education are suffering," said Mr Ouko.

The report by Ouko also revealed that the Siaya County Assembly was the weakest link in the county’s development.

Mr Ouko pointed out that when they followed the paper trail, they realised that those who withdrew the huge sums of money were not even on the county government's payroll.

The report indicated that for many of the projects, the contract sum at the time of award exceeded the budget available which indicates over-commitment in the budget for the FY 2021/22 and which is irregular.

The report further indicates that pending bills are almost equal to the financial deficit of approximately Sh1.12 billion, which reflects the carrying forward of projects that were not supported by funds.

“It pains me to see a woman who has supplied food or even worked so hard to deliver services yet she cannot be paid yet some people withdraw huge sums of money on that particular day. Extension services being carried out to help farmers cannot be done simply because veterinary doctors are not being paid while young men walk with bundles of notes in their pockets. Very sad,” said Mr Ouko.

Paper trail

Mr Ouko pointed out that when they followed the paper trail, they realised that those who withdrew the huge sums of money were not even on the county government's payroll.

The task force noted that Governor James Orengo had set up a sub-committee of the County Executive Committee to review pending bills. 

The CEC sub-committee prepared a report indicating that the pending bills stand at Sh1 billion as of December 8, 2022 comprising Sh463,161,010.13 relating to development expenditure while Sh573,445,588.23 relating to recurrent expenditure.

The report also revealed rampant abuse of the imprest system.

There is lack of standardisation of the standing imprest for office operations and prevalent instances of issue of cash to officers where the application and use of said imprests could not be determined.

The internal audit report of August 2021, indicates that transactions amounting to a total of Sh332,842,954.50 made from the imprest bank account did not qualify as petty cash due to their magnitude and nature. 

“The internal audit report of August 2021 indicates that Sh296,021,578.75 was paid as “other staff claims/allowances'' implying that payments that ought to have been processed through the IFMIS system were made through the imprest account, an example of the abuse of the imprest system,” said Mr Ouko.

Between July 1 and September 29, some Sh25,167,233.75 was paid to individual staff from the recurrent account purportedly for training activities which is yet to be ascertained.

Imprest account

In the same period, another Sh159,200,000 payments were made to individual staff from the imprest account.

Another Sh9,236,000 were paid to assembly staff, it is not clear what the money was meant for nor was it budgeted for.

The report also unearthed irregular transfer of funds from various county accounts to others contrary to the Public Finance and Management Act.

The audit put the County Assembly on the spot, blaming it for mutilating the budgets and stifling development over the years despite residents paying millions in taxes.

The Assembly headed by Speaker George Okode, is on spot for manipulating the budget presented for debate in the last two financial years, according to findings by a task-force formed to investigate the matter.

According to the 60-page report, the legislative wing exceeded the mandate of Public Finance Management Regulations 2015 (PFM) of adjustment of the budget by up to one per cent.

"While the principle of budgeting is that the executive prepares and presents a budget proposal to the assembly, the law allows the Assembly to propose adjustments to the executive’s budget proposals within the one per cent limit. However, in Siaya County, the assembly is making changes in the proposal in a manner that overhauls the whole of it,” read the report.

According to Mr Ouko, the usurping of powers to manipulate the budget by the assembly was a material breach of the principle of separation of powers thus compromising the oversight function of the assembly.

The task force also established gross misappropriation of public resources amounting to billions in the last three financial years.

During the Financial Year 2020/2021, the report revealed that a total of Sh1,076,718,608 was paid to individuals; where Sh780,697,079.35 were paid to various individual staff from the county recurrent accounts and an additional Sh296,021,528.75 paid to individuals through imprests.

The task force also established questionable expenditure of some Sh252,858,206.55 between July 1 and July 13, 2022 shortly before the new administration took over office.

The Ouko-led team said the expenditures were not clear and neither can they be substantiated.

There was also a possible existence of “ghost workers” in which some people were paid salaries and wages without a proper framework.

 “We need a special audit of the county employees both on a casual and permanent and pensionable basis. It is common knowledge that we must have casual workers; however, the records must be clear on the number. This is because the county incurs an average of Sh53 million monthly on manual payroll,” said Mr Ouko. 

The county government rolls out payroll on two different platforms; the staff who have the personal numbers are paid through the Integrated Personnel and Payroll Database (IPPD) as required, while some 4000-5000 who have not received personal numbers and other casuals are paid through manual payroll.

From the findings, neither the County Public Service Board nor the Director of Human Resources had a concrete number of workers paid on the manual payroll.

The board denied the existence of a manual payroll, whereas Human Resources gave conflicting information on the number of personnel on employment terms that are paid; lack of internal control creates opportunity and a possible introduction of ghost workers.

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