The Auditor-General Dr. Nancy Gathungu has exposed outrageous loot happening at the County Government of Bungoma under Governor Kenneth Lusaka.
According to her recently-published audit report for the financial year 22022/2023, Governor Lusaka was unable to explain the missing funds running into nearly a billion shillings.
The statement of assets and liabilities reflects a balance of Kshs.398,159,872 in respect of cash and cash equivalents which, as disclosed in Note 10A to the financial statements, comprises of balances in twenty-one (21) bank accounts maintained by the County Government.
However, the report says, bank reconciliation statements for six (6) bank accounts reflect receipts in cash book not recorded in bank statements totalling Kshs.911,792,018 yet the County Government failed to provide an explanation on why the receipts had not been banked as at 30 June, 2023 or evidence of subsequent banking.
In the circumstances, the accuracy and completeness of the cash and cash equivalents balance of Kshs.398,159,872 could not be confirmed.
The statement of receipts and payments reflects an amount of Kshs.5,149,895,102 in respect of compensation of employees as disclosed in Note 3 to the financial statements. However, the Integrated Payroll and Personnel Database (IPPD) records reflect an amount of Kshs.4,913,595,705 resulting to un-explained and unreconciled variance of Kshs.236,299,397 .
In another case involving Inaccuracy of Deposits and Retentions Balance, the statement of assets and liabilities reflects a deposits and retentions balance of Kshs.268,028,338 as disclosed in Note 12 to the financial statements. However, Note 10A on bank balances reflects a balance of Kshs.259,258,888 under deposits account resulting to an unexplained and unreconciled variance of Kshs.8,769,450.
There was also a report on ‘Unsupported Expenditure on Routine Maintenance of Vehicles’ where receipts and payments reflects an amount of Kshs.2,476,788,733 in respect of use of goods and services as disclosed in Note 4 to the financial statements. Included in this amount is Kshs.73,904,394 relating to routine maintenance – vehicles and other transport equipment.
However, logbooks for services, repairs and maintenance undertaken, invoices, local services orders and user requisitions were not provided for audit.
In the circumstances, the completeness of the expenditure of Kshs.73,904,394 relating to routine maintenance – vehicles and other transport equipment could not be confirmed.
Non-Compliance with Law on Fiscal Responsibility on Wage Bill
The statement of receipts and payments reflects an amount of Kshs.5,149,895,102 in respect of compensation of employees which represents 48% of the total receipts for the year of Kshs.10,732,728,072.
This was contrary to Regulation 25(1)(b) of the Public Finance Management (County Governments) Regulations, 2015, which states that total expenditure on the wage bill for County Governments should not exceed thirty-five (35) percent of the County Government’s total revenue.
In the circumstances, the County Government of Bungoma was in breach of the law.
Irregular Payment of Legal Fees
The Auditor-General also noted that Lusaka’s government used Kshs.17,073,558 to pay eight (8) law firms for provision of legal services to the
County Government.
However, procurement documents relating to the law firms including advertisements, tender opening and evaluation minutes, professional opinion, letters of
award and regret letters, were not provided for audit.
It was therefore not possible to ascertain how the consultants were identified and if proper
procurement procedures were followed. This was contrary to Section 91(1) of the Public
Procurement and Asset Disposal Act, 2015 which provides that open tendering shall be
the preferred procurement method for procurement of goods, works and services.
In the circumstances, Lusaka was in breach of the law and regularity of the legal
fees of Kshs.17,073,558 was suspicious.
Lusaka has been in the limelight for the bad reasons with thousands of Gen Z planning to stage peaceful demonstrations in town to demand for accountability from the County Government on Tuesday.
During his tenure as the first governor of Bungoma, Lusaka’s leadership was marred with massive corruption and he is apparently not retiring from alleged looting of public resources.
He has been on record enjoying foreign trips at public payers money where he was recently in South Korea to beg for school desks.
A separate audit report also flagged Bungoma County for operating the highest number of bank accounts – 352!