Meru County: Irregular Procurement, Ethnic Balancing and Other Stories FY 2015/2016
This article summarizes findings made by the Office of the Auditor General on Meru County Executive Audit reports covering the period ranging from 1 July 2015 to 30 June 2016 or Financial Year 2015/2016.
During the year under focus, Hon. Peter Munya was the Governor and the County Executive Committee Member for Finance was Muthomi J. Kirera. According to audit reports, Meru County had an enacted budget amounting to Ksh. 7.3 billion. The actual expenditure was Ksh. 5.6 billion representing 77% absorption rate.
Meru County was given an adverse Opinion by the Office of the Auditor General (OAG). Further, this blog article will take a look at various audit queries raised.
The cash book balances of three accounts revealed that there was understatement of bank balance by Ksh. 270.8 million as at 30 June 2016. This is shown in the extract below:
Further, analysis indicated that the Kenya Commercial Bank (KCB) Operation Account was overdrawn by Ksh. 8.8 million but no explanation was provided for that anomaly. This raises suspicion on the accuracy and completeness of the reported figure amounting to Ksh. 1.4 billion as cash and cash equivalents.
During the financial year up to 30 June 2016, the Accounts Receivable in the financial statements of Meru County was Ksh. 19.7 million. This amount included Ksh. 17.1 million which was a long outstanding rent from Meru County Hotel. This raises the question of whether that amount will be paid or be written off as bad debts.
Irregular Procurement for Construction of Boda Boda Stations
During the year under review the Meru County Executive via the Department of Culture, Gender Sports, Youth and Social Services paid Ksh. 2.6 million to a firm as a down payment for the construction of 20 Boda Boda stations within the county. The contract was award on 30 May, 2014 with a total amount of Ksh. 6.6 million.
A number of irregularities were noted such as use of restricted method of procurement which is against the Public Procurement Disposal Act, 2015. Only 5 bidders were invited to submit their tenders as opposed to more 10 as required by Section 54(3) of the Public Procurement Regulations, 2006.
The Office of the Auditor general made physical verifications which made more revelations. The anomalies are as listed below:
- The contractor did not install the wall side cover as well as rain water drainage system as provided for in the Bill of Quantities (BQ).
- The shade constructed at Nchiru market was complete but remained unused. Instead the Boda Boda riders conducted their business on the area on the opposite side of the shade. This may be an indicator that they were not consulted before construction began.
- Poor work was done on a shade in Muthara.
- At Maili Tatu, the shade was damaged during a motor vehicle accident that took place one month before the audit was carried out. No repairs have been done to restore the shade. The shade was used by miraa traders and shoe shiners instead of the Boda Boda riders. This is a clear indication that boda boda operators may not have requested for it.
Irregular Procurement of Audit Services
The Meru County Executive procured the services of KPMG to audit pending bills records at a contract sum of Ksh. 11.4 million. This was contrary to Section 226(3) of the Constitution of Kenya 2010 and Sec 48 of the Public Audit Act, 2015 which gives the mandate of auditing all public agencies to the Office of the Auditor General (OAG). In fact, the OAG would have conducted the audit free of charge.
As at 30 June 2016 the OAG found out that the contractor had been paid Ksh. 7.4 million (65% of the contract price) but no inception report and final report was submitted. This was a clear violation of the contract terms.
Based on the above information, the OAG concluded that this was not “a proper charge on public funds.” In fact the Meru County Executive did not receive a value-for-money on this contract.
Meru Diaspora Investor’s Conference
The Conference was held on 27 February 2016 @ Safari Park Hotel using a budget of Ksh. 7.6 million. Details on how this money was used was never made available for auditing. Signed schedules by participants was also not provided for verification. Further, Safari Park Hotel was not on the list of Meru County’s pre-qualified suppliers of conference and training services as required by sec 57 (1) of the Public Procurement and Asset Disposal Act, 2015. This was a violation of law.
Local Revenue Collection
As at 30 June 2016 Meru County had raised Ksh. 548.4 million of Own Revenue which was higher than a budget of KSh. 435.2 million. This means that Meru County exceeded its target by Ksh. 113.2 million. Getting past the target means either the target was too low compared to capacity or there was a windfall. Accurate forecasting of revenues is a must for Proper County planning and budgeting.
Ethnic Balancing in the workforce
As at 30 June 2016 Meru County has a total of 3,303 employees on its payroll out of which 2,759 were Meru (83.5%) and 544 or 16.3% were from other ethnic communities. This was a violation of paragraph 65 (1) (2) of the County Government Act 2012 which demands that at least 30% of all vacant posits should be filled by candidates who are not from the dominant ethnic community in the county who are in this case Meru. This means that Meru County owes other ethnic communities 13.5% of the total number of employees (3,303). This calculation can be done as: (13.5/100*3,303 = 445.9 positions).