The Judiciary is on the spot for loss of cash deposits amounting to Sh88 million and delays in recording payments of Sh390 million in cash books and receipts.
Auditor-General Nancy Gathungu, in the report for the financial year that ended June 2021, also raises concerns over failure by the Judiciary to promptly surrender revenue collected into the Consolidated Fund.
The auditor puts the Judiciary on the spot for lack of a fixed asset register and delayed completion of construction of 30 courts.
Ms Gathungu says the June 2021 bank reconciliation statements for Embu, Nakuru and Malindi courts reflect losses amounting to more than Sh88 million.
Embu lost cash deposits totalling Sh2,682,152, Nakuru (Sh84,588,258) and Malindi Sh1,455,800.
The losses occurred in the previous years, the report says.
“The nature of the loss, recovery strategies and court proceedings on the matter are not disclosed,” she says in the report.
The auditor adds that bank reconciliation statements for the general deposits reflect long outstanding items, including payments in bank statements not yet recorded in cash books totalling Sh87 million.
The statements also show Sh303 million receipts in the cash books not yet reflected in bank statements.
“No explanation was provided for delays in recording the payments in the cash books and the receipts in the bank statements,” the report says.
On failure to surrender revenue collected into the national Consolidated Fund, the auditor says the balance due for disbursement to the Exchequer was Sh476 million by June 30, 2021.
“The unremitted revenue relates to collections for May and June, 2021. Failure to disburse the revenue collected promptly to the exchequer contravenes Regulation 81(2) of the Public Finance Management (National Government) Regulations, 2015,” Ms Gathungu says.
“The receiver of revenue shall promptly pay...into the Consolidated Fund as soon as possible and in any case not later than five days after receipt thereof,” the said regulation says.
The Auditor-General adds that failure by Judiciary to remit the money to the exchequer promptly is in breach of the law.
The auditor says the financial statement of assets and liabilities shows Sh348 million relating to deposits for 58 court stations held by former district treasuries have not been paid to The National Treasury.
Though the Judiciary wrote to National Treasury Principal Secretary to confirm the liabilities, the letter has not been acknowledged.
According to the report, the Judiciary had bills totalling Sh1.6 billion, which were not settled during the 2020/21 financial year but were instead carried forward.
The bills included Sh49.5 million, which related to 2019/20 and earlier financial years.
“Failure to settle bills in the year to which they relate distorts financial statements and affects budgetary provisions for the subsequent year,” the report says.
The accuracy of loans from external development partners’ receipts of Sh1 billion for the year ended June 30, 2021 cannot be ascertained.
Ms Gathungu says there was failure to reflect original figures in the Statement of Comparative Budget and actual amounts. The auditor also notes irregular payment or retention of contractors’ money.