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How rogue county staff steal from public coffers

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Dn Twalib
Photo credit: Jeff Angote | Nation Media Group

In January 2023, Mr Charles Waka was elated after he won a contract to supply stationery to one of the county governments.

According to the contract, he was to supply stationery worth Sh100 million for a year.

Mr Waka walked to his commercial bank, took a loan and procured the items, hoping to get paid in order to service the loan and remain with a handsome profit.

But this was not to be. For close to a year, the county government has been taking him in circles over the payments. His loan continues to accumulate interest, with his property at risk of being actioned.

In June last year, county officials said his company would be paid. He proceeded to submit all the supporting documents after being promised that his company would be paid at the end of the last financial year, in June 2023.

“I was given the work plan and my company was one of those listed for payment. We were even told that the payment had been released. I do not know what happened after that. I have been following up every day because this is a loan that I took and I need to service,” Mr Waka told ‘Nation’.

His story is similar to that of thousands of other suppliers across the country who have found themselves facing the auctioneer’s hammer after supplying goods and services to the devolved units.

The Ethics and Anti-Corruption Commission (EACC) says the growing pending bills in counties is partly as a result of an emerging technique that is being used by rogue officials to beat the system.

According to EACC, the trend involves the use of junior county officers, including interns and relatives, to register briefcase companies to siphon billions of taxpayers' funds.

Requisition by the county to the Controller of Budget (CoB) for the withdrawal of funds from the County Revenue Fund (CRF) to pay authentic suppliers of goods and services to the devolved units then follows.

The money is later sent to the operational account made up of development and recurrent accounts, all linked to CRF.

Once the money is in the Integrated Financial Management System (Ifmis), the chief finance officer of the county, who is the primary approver, embarks on a selection process of suppliers to be paid.

Once the payment is approved, senior county officials embark on a dubious payment plan by “voiding” transactions in favour of a predetermined list of suppliers, different from the ones used to make a requisition to the CoB.

These suppliers, the commission said, are those willing to pay kickbacks and are directly or indirectly associated with the county officials.

The process of voiding a transaction involves cancelling a payment intended for the authentic supplier and introducing the briefcase companies into the Ifmis and attaching the bank accounts of the firms.

It is followed by a series of electronic funds transfer (EFT) to these companies from the Internet Bank (IB) platform at the Central Bank of Kenya.

The junior officers listed as directors of the companies and signatories to the bank accounts rarely benefit from the resources and a number of them have been arrested by the commission.

Mr Waka told ‘Nation’ that at some point he was requested to sign documents committing to give a kickback of at least 10 per cent of the amount he was to be paid before it can be released.

“You will release 20 per cent of it to them. You cannot get away with it and you must adhere to what you have agreed with them or they come after you,” Mr Waka told ‘Nation’.

The commission is currently investigating more than half of the counties using this technique to siphon county resources.

EACC Spokesperson Eric Ngumbi said the commission is currently working to build its capacity to identify and address the loopholes.

“We have noted a growing pattern of state officials in the counties inventing new mechanisms of defeating established accountability structures. We have continued to enhance the capacity of its investigators to stay ahead and we want to create a hostile environment for the individuals,” Mr Ngumbi said.

He urged governors and other senior officials to put in place measures aimed at protecting public resources.

“One of the reasons why corruption is thriving in counties is lack of commitment by the governors and other senior officials. Governors should take responsibility for protecting the public funds entrusted to their care and control. It is unfortunate that some governors have converted the public funds in the counties to operate like personal property,” he added.