The Anchor

Governor Ndeti

By Martin Masai

In this second serialization of the verbatim account of Governor Wavinya Ndeti’s responses on the use of public funds before the Senate Public Accounts Committee, The Anchor brings to the open the manner in which the accounts are presented.

In response to a query on the use of Kes 67m, the Wavinya team brought documents accounting for Kes 100m. They left the session without presenting an explanation for the error. Indeed, Wavinya and her retinue of officials looked bamboozled as senators, including Machakos Senator Agnes Kavindu shot questions that they could not answer. This triggered a question of whether the county is manufacturing documents to account for its finances. Committee Chairman Moses Kajwang demanded to be told why the Office of the Accountant General was not presented with the documents when they came calling.

In another episode, it was revealed that the county misallocated funds by raiding other accounts to fund for foreign travel without seeking Supplementary Budgets as is provided for by the Public Finance Management Act

Now read on…

Auditor General(OAG): Yes, Chair.

Kajwang: Are there surrender warrants that have been presented to you? 

OAG: Surrender warrants were presented for audit and we were able to verify.

Kajwang: So we shall review that and confirm whether the surrender was done in line with the law that requires interest to be charged. And Unsupported prior adjustments? I think on the very first issue, is this an accounting matter or it’s a risk of loss of finances?

OAG: It is an accounting matter, Chair, and it relates to number one.

Kajwang: The one which we are directed should be adjusted in the ongoing financials?

OAG: Yes.

Kajwang: Fine, we shall take note of that. And confirmed assets balance? We had a discussion and made a distinction between historical assets and additions. Now, for historical assets, I think we are all aware of the problems and inefficiencies that have carved the exercise, particularly IGRTC. We are more interested in the additions. Auditor General, can you confirm that the additions during the year under review have been disclosed?

OAG: Chair, the additions were disclosed but there was an issue of work in progress where there were still so many stalled projects, if I can put it that way, and the values of those stalled projects all over has not been captured as part of the work in progress.

Kajwang: So you have Kes. 476 million as work in progress, which means there is no value for money? 

OAG: Exactly, Chair.

Kajwang: Okay, we shall come to the projects in the subsequent issues. Use of goods and services, Kes.8.1 million. Kes.17 million was omitted in the GL (General Ledger) in IFMIS. Has this now been accounted for, AOG? 

OAG: Chair, it has been accounted, the search was from the current account, but from now the development for roads and transport, this entire figure was confirmed. First was Kes.10 million and then Kes.7 million. This is because under the transport, roads and transport, the fuel is actually capitalized because this is for construction of roads.

Kajwang: So the explanation provided can address the issue? 

OAG: It can address the issue, Chair. 

Kajwang: Kes.8.2 million unsupported expenditures. Here you have reported that the county has provided evidence of Kes.100 million rather than Kes.67 million.

Vouchers for Kes 100m presented to account for Kes 67m

OAG: Yes, Chair. In the process of supporting, the total figure of the supported vouchers was adding up to Kes.100 million instead of what was credited, which is Kes. 67,574,700.

Kajwang: We have a problem with that, Governor, and whereas we will consider your written response, we must… you must tell us, for example, under hospitality supplies and services and other operating expenses, Kes.25 million. Did you provide the vouchers to support that payment? And if you did, in which appendix can we find them? Let’s just take one row. Relating to hospitality supplies and services and other operating expenses, Kes.25 million.

Kajwang: Refer us to the appendix and then just show us this is payment for voucher 1, 2, 3, totaling to Kes. 25.3 million. 

Kasanga: Chair, through the Governor, we were able to submit the payment vouchers in support of Kes. 25,358,115 and it is Appendix 8.2, number 9. 

Kajwang: Appendix 8.2, Auditor General. 

OAG: Chair, that’s Appendix 8.2. Yes, Chair, that is Appendix 8.2. Over-supported, yeah. The challenge was only the issue of particularizing which specific expenditure they were supporting and that’s how we ended up with a higher figure than what was in the query.

Kajwang: So, you have come with this to support an expenditure of Kes.25 million. If these payment vouchers were present during audit, why would they not be given to the auditor? Why do you have to come with them to Nairobi? All this, Governor, all this, you have brought them to confirm expenditure of Kes. 67 million. Why do we waste the time of the Senate if these records were available in the county for you to carry them? It’s actually half your submission. You spent more than Kes.10 billion in the year, but the records you have come with, half of it is just to explain payment vouchers for 67 million. 

Kajwang: Were these manufactured after the audit?

Wavinya: No. They cannot be manufactured.

Kajwang: Where were they when the auditor was looking for them? 

Kasanga: Chair, through the Governor, the audit exercise, sometimes the documentation is provided. It’s a continuous process. Sometimes the process ends when some documents are brought. 

Ask your County Attorney is he is still in office

Kajwang: I want you to ask your county attorney, if he’s still in office, to interpret for you that ruling, which judge rendered that ruling, about the finality of audit reports and the timelines. It will make nonsense of your submission. Governor, I hope your chief officer is listening. Whatever you are submitting is a perception of the past. The courts have ruled that audits must end by a certain date.

Kajwang: The Auditor General must report by 31st of December. Parliament must consider the reports within six months. The county government must provide records within the time frames in the Constitution So, vacate your mind from what we used to do in the past. Going forward, we will not be accepting these kinds of things outside the audit period. We would just make a declaration that 67.5 million was stolen in Machakos. Because when the auditor was there, the vouchers were not provided. Now, Auditor General, you said it’s made worse that the evidence in these files totals to 100 million.

OAG: That is the position, Chair.

Kajwang: So, in which line item has the evidence exceeded your…

OAG: That was the problem, Chair, because the support was not itemizing. It was not being particularized in some of the cases, where you get one voucher supporting more than three different payments, and only one payment was to come to support the 67million. 

Kajwang: I think what you can help us with, analyze the vouchers, let us know in which row there is a problem. If there is a row with a problem, that would be indicative of loss of public funds. If there is a row that is properly supported, we can tick it off and say it has been supported.

Kajwang: That’s okay.

Cherergei: Just a quick observation as we exit, Chair. When you look at those Appendix 8A, even 8.2 on the 25.3 million 58115, Chair, I can see some annexures that have been attached are irrelevant. It does not answer the audit query. And I don’t know why. I don’t know. Maybe, Chair, there is always a perception that the committee is too busy or members are too busy until they can’t read through. Because a quick glance to this, some of them are receipts that are not even authenticated. They are not stamped.

Cherergei: I can only see one payment voucher, Governor, that is of Kes.1.9 million that was paid…delivery of general office(supplies). But the rest, inspection and clearance. I look the issue and even receipts from Reliable Packers Limited, some agreements…some lists.  But the question was answering (is) where are the payment vouchers that can total to Kes 25.358? In fact, the question was very specific, Governor, and I hope your people are listening. It says payment vouchers were not provided. It means if the payment vouchers had been provided, then this question would have been answered.

Cherergei: But the only payment voucher I can see at a quick glance is of the 1.9 million. The others are receipts I have seen, the counter receipt voucher that talks about numbers like counter book and others from the county government of Machakos. And others are just the lists. Others are the pictures of building materials and what have you, single business permit. So I think, Chair, I agree with you that the issue was payment vouchers. 

Kajwang: So on this, because of time, Auditor General, you shall review and advise us, and your advice on this will be final.

Kajwang:  Next, misclassified expenditure. Again, has this been resolved, AOG? 

OAG: Not yet, Chair. 

Kajwang:  What is the gap? 

OAG: For the issue of misclassified expenditure share, this was involving two donor funds.

No, no, no. Governor, you shall not reopen

Wavinya: Chair…

Kajwang:  Order, Governor. I think it is to your best interest that we proceed. 

Wavinya: There is something I want to be very clear about what Senator has said. The information is here

Kajwang:  No, no, no. Governor, you shall not reopen. The information is here. I have given the ruling as a Chair. I have told the Auditor General to verify. And then we shall take the word of the Auditor General. Proceed, AOG, AOG: The issue is not addressed. The amount of the 6.98 million, 8.96 million, 6.90 million, the support, proper support has not been available, so that we can be able to verify the issue of addressing the misclassification.

Kajwang:  Who is custodian of the chart of accounts? Isn’t it the National Treasury?

OAG: The National Treasury is in charge, but this is shared now to the counties. And, of course, also…

Kajwang:   I would say that because they are referring to the chart of accounts as being the problem in terms of posting of expenditure. Because I’m wondering how the chart of accounts would then allow you to post expenditure relating to foreign travel to domestic travel.

OAG: That is now the point here.  So it cannot be explained under chart of accounts. 

OAG: That would not be adequate explanation.

So you are raiding other budget lines

Kajwang:  When you have misclassification of expenditure, it simply means you have exhausted your budget lines, so you are raiding other budget lines, without following the necessary approval. OAG is that the symptom? 

OAG: That is actually the symptom, and probably what would have been the cure is the supplementary budget for reallocation.

Kajwang:  Controller of budget? This thing of misclassification of expenditure? Are we making the right analysis? That when they misclassify, it means they have exhausted domestic travel? Let’s go to year end, year cutoff procedures. Auditor General, are these related to late exchequer disbursements or… You are reading through it. Did you table it? 

COB: Yes.

Kajwang:  You only tabled the taxed and untaxed invoices. Can you also table the contingent liabilities register? So it contains the contingent liabilities…

COB: Yes. It clearly shows all invoices… The results of the audit are in that report.

COB: Yes, it is from the Pending Bills Task Force and the report that was given to the Legal Implementation Committee. Further to that, we recommended to Her Excellency that we need to undertake a legal audit of the department. That includes… 

Kajwang:  That recommendation is in that report? No, that recommendation is what we gave to Her Excellency.

Kajwang:  I think you understand where I’m going to. Yes, I do.

Kajwang:  We need documentary evidence of those initiatives and the advice that you have given, even if it’s work in progress.

COB: Yes. 

Kajwang:  Because you made it clear that it’s work in progress. 

COB:  Yes.

Kajwang:  We need it reduced in writing. Maybe a status report, because that report seems to be just a schedule, an Excel spreadsheet of transactions. 

COB: Yes.

Kajwang:  So, can you do a letter, Governor, to the Senate showing that this is what we have done, these are the milestones, this is what we have achieved, this is what we still intend to achieve. Then it can guide us when we are doing our report.

Wavinya: Thank you, Chair. We’ll do that. 

Kajwang:  So, can we do it within the 14-day window? 

Wavinya:  Yes, Chair.

Kajwang:  Let’s do that within the 14-day window.

Wavinya: Within the 14-day window, we’ll do it, Chair. Honourable Members, we could proceed. Under Budget Control and Performance, if 1.5% is 25 million…

To be continued