Green Book County Assemblies Vol. 2 2022 2023

Enhancing Accountability

AUDITOR-GENERAL’S REPORT
ON THE COUNTY GOVERNMENTS
COUNTY ASSEMBLIES 2022-2023
VOLUME 2
VISION
Making a difference in the lives and
livelihoods of the Kenyan people
MISSION
Audit services that impact on effective and
sustainable service delivery
OUR CORE VALUES

Integrity • Credibility • Relevance •
Accountability • Independence
REPORT
OF
THE AUDITOR-GENERAL
ON
THE COUNTY GOVERNMENTS
FOR
THE YEAR 2022/2023
VOLUME 2 – COUNTY ASSEMBLIES

Table of Contents
VOLUME 2 – COUNTY ASSEMBLIES Page
Foreword…………………… ....................................................................................... iii

Introduction ................................................................................................................vi
Code County Assembly
1. County Assembly of Mombasa ................................................................. 1

2. County Assembly of Kwale ....................................................................... 3
3. County Assembly of Kilifi ........................................................................... 5
4. County Assembly of Tana River ................................................................ 8
5. County Assembly of Lamu ...................................................................... 13
6. County Assembly of Taita/Taveta ............................................................ 17
7. County Assembly of Garissa .................................................................. 21
8. County Assembly of Wajir ....................................................................... 25
9. County Assembly of Mandera ................................................................ 29
10. County Assembly of Marsabit .................................................................. 31
11. County Assembly of Isiolo ...................................................................... 35
12. County Assembly of Meru ...................................................................... 40
13. County Assembly of Tharaka-Nithi .......................................................... 43
14. County Assembly of Embu ...................................................................... 47
15. County Assembly of Kitui......................................................................... 53
16. County Assembly of Machakos ............................................................... 57
17 County Assembly of Makueni .................................................................. 61
18. County Assembly of Nyandarua ............................................................. 67
19. County Assembly of Nyeri…………………………………………………………………………………..73
20. County Assembly of Kirinyaga ................................................................. 77
21. County Assembly of Murang’a................................................................. 79
22. County Assembly of Kiambu .................................................................. 82
23 County Assembly of Turkana .................................................................. 93
24. County Assembly of West Pokot ............................................................. 99
25 County Assembly of Samburu ............................................................... 103
26 County Assembly of Trans Nzoia .......................................................... 107
27 County Assembly of Uasin Gishu .......................................................... 111
28. County Assembly of Elgeyo/Marakwet .................................................. 116
29. County Assembly of Nandi .................................................................... 119
30. County Assembly of Baringo ................................................................. 123
31. County Assembly of Laikipia ................................................................. 126
32. County Assembly of Nakuru .................................................................. 130
33. County Assembly of Narok .................................................................... 133
34. County Assembly of Kajiado.................................................................. 137
35. County Assembly of Kericho ................................................................. 141
36. County Assembly of Bomet…………………………………………………………………………….. 144
37. County Assembly of Kakamega ............................................................ 147
38. County Assembly of Vihiga.................................................................... 151
39. County Assembly of Bungoma .............................................................. 158
40. County Assembly of Busia..................................................................... 160
41. County Assembly of Siaya..................................................................... 162
42. County Assembly of Kisumu.................................................................. 166
43. County Assembly of Homa Bay ............................................................. 169
44. County Assembly of Migori .................................................................... 174
45. County Assembly of Kisii ....................................................................... 184
46. County Assembly of Nyamira ................................................................ 188
47. County Assembly of Nairobi City ........................................................... 193
APPENDIX ............................................................................................................. 201
ii
Foreword
This Report, commonly known as the Green Book, is a compilation of the audit reports of
the County Governments which includes County Executives and County Assemblies for
the year ended 30 June, 2023.
The Auditor-General is mandated by the Kenyan Constitution, under Article 229, to audit
and report on the use of public resources by all entities funded from public funds. These
entities include the National Government, County Governments, the Judiciary,
Parliament, Statutory Bodies/State Corporations, Commissions, Independent Offices,
Public Debt, Political Parties funded from public funds, other Government Agencies and
any other entity funded from public funds. In addition, Article 229(6) requires the Auditor-
General to confirm whether or not public resources have been applied lawfully and
effectively. The mandate of the Auditor-General is further expounded by the Public Audit
Act, 2015.
Article 229 (7) of the Constitution requires the Auditor-General to audit and submit reports
to Parliament or the relevant County Assembly within six (6) months after the end of the
financial year. However, Section 81(4) of the Public Finance Management Act, 2012,
reduces the timeline to three (3) months by giving entities leeway to prepare and submit
financial statements for audit at the end of September each year. This reduces the
duration of audit and reporting from the six (6) months given by the Constitution to three
(3) months. This has adversely affected the timelines for reporting, leading to backlogs
and affecting the efficiency and effectiveness of oversight by Parliament, the Senate and
the County Assemblies.
Further, as previously reported, an effective mechanism for follow-up on the

implementation of audit recommendations is lacking. As a result, most audit queries recur
in subsequent audit reports due to a lack of requisite action. As outlined in Section
204(1)(g) of the Public Finance Management Act, 2012, a National Government entity
that fails to address issues relating to finance raised by the Auditor-General, to the
satisfaction of the Auditor-General, may be sanctioned by the Cabinet Secretary for
Finance.
However, despite numerous reports indicating a lack of accountability and adequate
documents to support the legality and effectiveness in the use of public resources, failure
to apply the requisite sanctions and consequences has resulted in some Accounting
Officers not adequately accounting for the management and use of public resources with
impunity. Lack of action and sanctions has also led to fiscal indiscipline including
misallocations, wastage of resources, lack of value for money in the implementation of
projects and loss of public funds, thereby impacting negatively on development
programmes. This in turn threatens economic growth and service delivery sustainability.
There are also instances where some Accounting Officers are in breach of Section 62 of
the Public Audit Act, 2015 by failing to adequately prepare for audit which is exhibited by
numerous inaccuracies in financial statements presented for audit, lack of requisite
iii
supporting documents, several revisions of financial statements and, in some cases,
reluctance to cooperate with the auditors during the audit process.
The Office of the Auditor-General has, however, continuously improved the effectiveness
and quality of the audit process to ensure that the audit results and the recommendations
thereof are credible, relevant, reliable and value-adding. This is geared towards
influencing an improved decision-making process and making a difference in the lives
and livelihoods of the Kenyan people through a positive impact on the lives and livelihoods
of citizens and other stakeholders. The provision of quality and effective audit services
and confirmation of the lawfulness and effectiveness in programme implementation
requires comprehensive scrutiny and evaluation of supporting documents. Most critical is
the physical confirmation of the existence and utilization of projects or programmes
implemented throughout the country. Achieving this requires an independent and well-
resourced audit office with guaranteed adequate funding to enable efficient, effective and
timely execution of the audit cycle as well as retention of optimal professional staffing
levels to ensure continuous, quality and sustainable audit operations.
The Office continues to seek financial independence and support from Parliament and
The Executive through The National Treasury for the enhancement of resources. This will
enable it to build technical capacity, expand its presence in the counties, and widen the
scope and comprehensiveness of audits. In addition, it will motivate staff. We continue to
devolve our services closer to the people through the establishment of regional offices
and the construction of office premises to accommodate our staff. This is to address the
audit needs at the grassroots level. Currently, we have fifteen (15) regional offices
following the establishment of two (2) additional regional offices in Kilifi and Kericho during
the year under review. We have constructed our own offices in Garissa, Kakamega and
Eldoret. Construction works in Embu are almost complete, and the procurement process
for the Mombasa offices has commenced. Due to a lack of fuding, plans for the
construction of our Headquarters in Nairobi, currently at the design stage, have been
delayed. However, the Office continues to appeal to Parliament and The National
Treasury to provide adequate funds to enable us to perform our functions and achieve
our mandate in enhancing accountability across Government, both at the national and
county levels and in all other entities funded from public funds.
Over the years, the audit scope has been expanding due to the expansion of Government
programs to ensure sustainable development and delivery of continuous and quality
services to the citizens. This has led to the growth in the national budget and the formation
of additional entities that I am required to audit and report on. Over nine thousand (9,000)
Public Secondary Schools were directed by the Principal Secretary for the State
Department for Basic Education, to prepare and submit financial statements to the
Auditor-General for audit from 30 June, 2021. Several schools have complied with this
directive. My Office has undertaken a pilot study and sampled one hundred and sixteen
(116) public secondary schools, conducted audits and issued reports for the two years
(2020/2021 and 2021/2022). My office is currently evaluating the outcome of the audits
and is expected to roll out the audit to all public secondary schools.
iv
Further, I am required to separately audit and report on financial statements for all three
hundred and fifty-eight (358) Level 4 hospitals and fourteen (14) Level 5 hospitals. I am
also required to audit a total of two hundred and eighteen (218) Technical and Vocational
Education and Training (TVET) Institutions. This number continues to increase as we are
currently undertaking an evaluation exercise with the State Department for Technical,
Vocational Education and Training to identify all institutions funded through the
Exchequer which will include Community Vocational Training Institutions that are
estimated to be over one thousand two hundred (1,200). In addition, new projects and
funds have been created and all require timely oversight.
During the period under review, the Office of the Auditor-General made significant strides
in enhancing audit services delivery to Kenyans. The Office has entered into partnerships
with other Supreme Audit Institutions (SAIs) regionally and globally and with local
oversight institutions such as the Ethics and Anti-Corruption Commission (EACC), the
State Corporations Advisory Committee (SCAC) and the Salaries and Remuneration
Commission (SRC) among other organizations, to enhance the impact of audit through
learning, knowledge sharing, innovation and collaboration.
Specific reports together with my opinion for each entity are contained in the respective
County Executive's audited financial statements for the year ended 30 June, 2023, which
I have already submitted to the Senate, County Assemblies and each Accounting Officer.
I wish to sincerely thank the entire staff of the Office of the Auditor-General for their
commitment, passion and professionalism in carrying out their duties despite the
challenges posed by the lack of proper accommodation and adequate funding. Special
appreciation goes to the team that tirelessly prepared this Book.
I wish also to appreciate my clients or auditees for the cooperation they accorded my staff
during the audit.
FCPA a n s
AUDITQR-GEN ERAL
Nairobi
15 March, 2024
.<
v
REPORT OF THE AUDITOR-GENERAL ON COUNTY GOVERNMENTS FOR THE YEAR
2022/2023
VOLUME 2 – COUNTY ASSEMBLIES
1.0 Introduction
1.1 Legal Mandate of the Office of the Auditor-General
The Auditor-General is mandated under Article 229, of the Constitution of Kenya, to audit
and report on the use of public resources by all entities funded from public funds. These
entities include the National Government, County Governments, the Judiciary, Parliament,
Statutory bodies/state corporations, Commissions, Political Parties funded from public
funds, other Government agencies and any other entity funded from public funds. The
mandate of the Auditor-General is further expounded by the Public Audit Act, 2015.
The Constitution requires the Auditor-General to submit audit reports of public entities to
Parliament and the relevant County Assemblies by 31 December, every year. In carrying
out the mandate, the Auditor-General is also required, under Article 229 (6) to assess and
confirm whether public resources have been applied lawfully and in an efficient way by the
Public Entities.
Further, the objects and authority of the Auditor-General, as outlined in Article 249 of the
Constitution, are: to protect the sovereignty of the people; to secure the observance by all
State Organs of democratic values and principles; and to promote constitutionalism. The
Auditor-General has also been given powers by the Constitution, under Article 252(1), to
conduct investigations, conciliations, mediations and negotiations and to issue summons to
witnesses for the purpose of investigations.
1.2 Responsibilities of Management and those Charged with Governance
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with the International Public Sector Accounting Standards
(IPSAS)-Cash Basis, as prescribed by the Public Sector Accounting Standards Board
(PSASB), and for the submission of the financial statements to the Auditor-General in
accordance with the provisions of Section 47 of the Public Audit Act, 2015.
Further, Management is responsible for maintaining effective internal control environment

necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error, and for the assessment of the effectiveness of
internal control, risk management and governance.
Management is also required to ensure that the activities, financial transactions and
information reflected in the financial statements are in compliance with the law and other
relevant or applicable authorities, and that public resources are applied in an effective way.
vi
Those charged with governance are responsible for overseeing the County’s financial
reporting process, reviewing the effectiveness of how Management monitors compliance
with relevant legislative and regulatory requirements, ensuring that effective processes and
systems are in place to address key roles and responsibilities in relation to governance and
risk management, and ensuring the adequacy and effectiveness of the control environment.
1.3 Auditor-General’s Responsibility
My responsibility is to conduct audits of the financial statements in accordance with the

International Standards of Supreme Audit Institutions (ISSAIs) and to issue an auditor’s
report. The audit report includes my opinion as provided by Section 48 of the Public Audit
Act, 2015, and the report submitted to Parliament or relevant County Assembly in
compliance with Article 229(7) of the Constitution.
In addition, Article 229(6) of the Constitution requires me to express a conclusion on whether
or not, in all material respects, the activities, financial transactions and information reflected
in the financial statements are in compliance with the law and other authorities that govern
them, and that public resources are applied in an effective way. I also consider the entities’
control environment in order to give an assurance on the effectiveness of internal controls,
risk management and overall governance processes and systems, in accordance with the
provisions of Section 7(1)(a) of the Public Audit Act, 2015.
I am independent in accordance with Article 249(2) of the Constitution of Kenya, 2010 and
ISSAI 130 on the Code of Ethics. I have fulfilled other ethical responsibilities in accordance
with the ISSAI and in accordance with other ethical requirements applicable to performing
audits of public entities in the Republic of Kenya.
1.4 Reporting Structure

The structure of my report is in fulfilment of the reporting requirements of Article 229(6) of
the Constitution of Kenya, 2010, which provides that an audit report shall confirm whether
or not public money has been applied lawfully and in an effective way. Section 7(1)(a) of the
Public Audit Act, 2015 also requires that I provide assurance on the effectiveness of internal
controls, risk management and governance in National and County Governments entities.
In addition, the International Standards of Supreme Audit Institutions (ISSAIs), now require
the incorporation of Key Audit Matters in the report on the financial statements, which are
those matters that I determine in my professional judgment, are of most significance in the
audit of the financial statements as a whole, for the year under review. In order to address
these requirements, my audit reports contain the following:
i. Report on Financial Statements, in which I give an audit opinion on whether the

financial statements present a true and fair view of the financial position and
performance of the entity.
ii. Report on Lawfulness and Effectiveness in Use of Public Resources, in which I give
a conclusion on whether or not Public Resources have been applied lawfully and in
effective way.
vii
iii. Report on Effectiveness of Internal Controls, Risk Management and Governance, in
which I give a conclusion on whether internal controls, risk management and overall
governance were effective.
iv. Report on Other Legal and Regulatory Requirements is included where applicable,
especially for the entities that are registered under the Companies Act and any other
enabling legislation and authorities that require such disclosure.
1.5 Audit Opinions
I have expressed the different types of audit opinions based on the following criteria: -
a) Unmodified/ Unqualified Opinion
The books of accounts and underlying records agree with the financial statements and no
material misstatements were found. The financial statements give a true and fair view of
the operations of the entity.
b) Qualified Opinion
Financial transactions were recorded and are to a large extent in agreement with the
underlying records, except for cases where I noted material misstatements or omissions in
the financial statements. The issues though material, are not widespread or persistent.
c) Adverse Opinion
The financial statements exhibit significant misstatement with the underlying accounting
records. There are significant disagreements between the financial statements and the
underlying books of accounts and/or standards. The problems are widespread, persistent
and require considerable interventions by the Management to rectify.
d) Disclaimer of Opinion
The financial statements exhibit serious and significant misstatements that may arise from
inadequate information, limitation of scope, inadequacy or lack of proper records such that I
was not able to form an informed opinion on the financial operations.
1.6 Audit Findings
A list of the County Executives and the types of opinion given against their financial
statements are contained in the Appendix. The audit findings noted during the audit of the
County Assemblies financial statements for the year ended 30 June, 2023 are presented in
the following section.
viii
COUNTY ASSEMBLY OF MOMBASA – NO.1
REPORT ON THE FINANCIAL STATEMENTS

Basis for Qualified Opinion
1. Variance in Exchequer Releases
The statement of receipts and payments reflects transfers from County Treasury balance
of Kshs.808,684,687 as disclosed in Note 1 to the financial statements. However, analysis
of Exchequer requests, approvals and transfers revealed an amount of Kshs.808,602,367
resulting to an unexplained variance of Kshs.82,320.
In the circumstances, the accuracy and completeness of transfers from the County
Treasury amounting to Kshs.808,684,687 could not be confirmed.
2. Variance in Compensation of Employees

Note 4 to the financial statements reflects basic salaries for permanent employees of
Kshs.167,710,219 while the supporting ledgers and payrolls reflect Kshs.353,800,559
resulting to unexplained variance of Kshs.186,090,340. Further, Note 4 reflects personal
allowances paid as part of salary amounting to Kshs.161,623,824 while ledgers and
payrolls reflect Kshs.161,563,824 resulting to the unexplained variance of Kshs.60,000.
In the circumstances, the accuracy and completeness of basic salaries of permanent
employees amounting Kshs.167,710,219 and personal allowances paid as part of salary
of Kshs.161,623,824 could not be confirmed.
Emphasis of Matter
3. Budgetary Control and Performance
The statement of comparison of budget and actual amounts reflects final revenue budget
and actual amounts on comparable basis of Kshs.904,783,021 and Kshs.808,684,687
respectively, resulting to underfunding of Kshs.96,098,334 or 11% of the budget.
Similarly, the County Assembly spent Kshs.795,113,039 against an approved budget of
Kshs.904,783,021 resulting to under absorption of Kshs.109,669,982 or 12% of the
budget.
In the circumstances, the underfunding and under absorption may have impacted
negatively on the implementation of the County Assembly’s programs.
My opinion is not modified in respect of this matter.
1
REPORT ON LAWFULNESS AND EFFECTIVENESS IN USE OF PUBLIC
RESOURCES
Basis for Conclusion
4. Irregular Payment of Legal Fees

The statement of receipts and payments reflects use of goods and services amount of
Kshs.270,578,770 as disclosed in Note 5 to the financial statements. The amount
includes specialized materials and services amount of Kshs.1,629,500 out of which an
amount of Kshs.300,000 was paid to a private legal consultant for services offered during
the swearing in ceremony of the Members of County Assembly. However, Management
did not explain why they hired the services of a private legal firm instead of using the
County’s internal legal counsel.
In the circumstances, value for money on the expenditure of Kshs.300,000 paid to a
private legal consultant could not be confirmed.
REPORT ON THE EFFECTIVENESS OF INTERNAL CONTROLS, RISK

MANAGEMENT AND GOVERNANCE
Conclusion
5. There were no material issues raised on internal controls, risk management and
governance.
2
COUNTY ASSEMBLY OF KWALE – NO.2

6. Un-Supported Expenditure
The statement of receipts and payments and as disclosed in Note 5 to the financial
statements reflect use of goods and services amount of Kshs.300,928,656 which includes
expenditure of Kshs.138,069,445 on domestic travel and subsistence. Review of sampled
payment vouchers revealed that payments totalling Kshs.6,804,600 on domestic travel
and subsistence allowance were not supported with signed attendance schedules for the
events attended.
In the circumstances, the accuracy and completeness of expenditures of Kshs.6,804,600
on domestic travel and subsistence could not be confirmed.
Emphasis the Matter

The statement of comparison of budget and actual amounts - recurrent and development
reflects final receipts budget and actual amounts on comparable basis of
Kshs.1,169,141,072 and Kshs.955,008,190 respectively, resulting to under-funding of
Kshs.214,132,882 or 18% of the approved budget. Similarly, the County Assembly spent
Kshs.947,446,328 against an approved budget of Kshs.1,169,141,072, resulting to an
under-expenditure of Kshs.221,694,744 or 19% of the approved budget. The under-
funding and under-expenditure affected implementation of the planned programs
negatively impacting on service delivery to the public.
Other Matter
8. Unresolved Prior Year Audit Issues

In the audit report of the previous year, several issues were raised under the Report on
Financial Statements and Report on Lawfulness and Effectiveness in Use of Public
Resources. However, the Management has not resolved the issues or given any
explanation for non-adherence to the reporting format prescribed by the Public Sector
Accounting Standards Board.

RESOURCES
9. Irregular Payment of Ward Officers’ Salaries

The statement of receipts and payments reflects compensation of employees of
Kshs.241,761,780 which as disclosed in Note 4 to the financial statements includes basic
3
wages of temporary employees of Kshs.28,499,000 in respect of remuneration for ninety
(90) ward staff for the Members of the County Assembly (MCAs) employed under the
provisions of Commission on Revenue Allocation Circular Ref. CRA/CSO/CMG/9/Vol.V
(43) of 3 August, 2020. Review of the ward staff salaries revealed that the salaries paid
were either higher or lower than the salary scales set by the CRA Ward Officers’ salary
structure, resulting to over and under payments totalling Kshs.638,133 and Kshs.124,683
respectively. This was contrary to the CRA Circular that prescribed the salary scales.
In addition, Management did not provide for audit advertisements, applications,

shortlisting and interviews reports to support the recruitment of the ninety (90) ward
offices staff by the County Assembly Service Board. This was contrary to Section 12(7)(b)
of the County Government Act, 2012 which provides that the County Assembly Service
Board is responsible for constituting offices in the County Assembly Service, and
appointing and supervising office holders.
In the circumstances, Management was in breach of the law and the regularity of
engagement of the Ward officers could not be confirmed.
10. Over Commitment of Salaries
Review of the payroll records revealed that six employees had salary deductions in
excess of two-thirds of their basic salary, contrary to Section D22(2) of the County Public
Service Human Resource Manual and Section 19(3) of the Employment Act, 2007 which
requires that the total amount of deductions which may be deducted by an employer from
the salary and wages of the employee at any one time shall not exceed two-thirds of the
basic pay.
In the circumstances, Management was in breach of the law.
REPORT ON EFFECTIVENESS OF INTERNAL CONTROLS, RISK MANAGEMENT

AND GOVERNANCE
11. Salaries Paid Outside Integrated Personnel and Payroll Database (IPPD)
Review of personnel records indicated that the Members of the County Assembly (MCAs)
were sworn in on September, 2022 and thereafter defined in the IPPD system for salary
processing. However, three (3) MCAs were paid salaries totalling Kshs.6,156,744 outside
the IPPD system in the year under review.
In the circumstances, the effectiveness and integrity of controls in place for salaries
processed outside the payroll could not be confirmed.
4
COUNTY ASSEMBLY OF KILIFI – NO.3
12. Misclassification of Personal Allowances to Domestic Travel

The statement of receipts and payments reflects use of goods and services expenditure
of Kshs.413,254,831 which includes domestic travel and subsistence balance of
Kshs.198,607,724 as disclosed in Note 3 to the financial statements. However, review of
records revealed that payments totalling Kshs.3,523,000 relating to personal allowances
were wrongly charged to domestic travel instead of compensation of employees.
In the circumstances, the accuracy and completeness of the domestic travel and
subsistence and compensation of employee balance could not be confirmed.
Other Matter
13. Unresolved Prior Year Matters

Resources. However, the Management has not resolved the issues or given any
explanation for non-adherence to the reporting format prescribed by the Public Sector
Accounting Standards Board.

RESOURCES
14. Employment of Members of Staff above the Approved Ceiling

During the year under review, the County Assembly had a total of one hundred and
twenty-six (126) staff serving in various positions. This was contrary to the guidelines of
the Commission on Revenue Allocation through Circular ref CRA/FA/01VOL.11(22) on
County Government recurrent expenditure ceilings for financial year 2018/19 dated
28 June, 2018, which recommended the number of staff members to be one hundred
(100). In addition, one hundred and fifty-nine (159) members were engaged on temporary
terms and attached to the Members of County Assembly and the Speaker.
In the circumstances, Management was in breach of the Commission on Revenue

Allocation guidelines.
15. Non-Compliance with One Third Basic Salary Rule

Review of payroll records revealed nine (9) members of staff had committed their salaries
beyond the allowable two-thirds in the month of June, 2023 while four (4) members of
5
staff earned Nil salaries in the month of August and one (1) member of staff earned Nil
salary in the month of October, 2022. This was contrary to the provisions of Section 19(3)
of the Employment Act, 2007 which states that the total amount of all deductions that may
be made by an employer from the wages of his employee at any one time shall not exceed
two thirds of such wages or such additional or other amount as may be prescribed by the
Minister either generally or in relation to a specified employer or employee or class of
employers or employees or any trade or industry.
16. Non-Compliance with Law on Ethnic Diversity

Review of records revealed that the County Assembly had a staff establishment of one
hundred and twenty-six (126), out of which one hundred and sixteen (116) or 92% were
from one dominant ethnic community. Further, out of the total number of employees, ten
(10) were recruited during the year under review out of which eight (8) were from the
dominant ethnic community.
This is in contravention of Section 65(1)(e) of the County Government Act, 2012 which
states that in selecting candidates for appointment, the County Public Service Board shall
consider the need to ensure that at least thirty percent of the vacant posts at entry level
are filled by candidates who are not from the dominant ethnic community in the County.
17. Stalled Construction of County Assembly Offices

As previously reported, a contract for the construction of County Assembly offices was
awarded to a local Company on 12 February, 2016 at a contract sum of
Kshs.508,549,884. However, due to poor performance of the contractor, the contract was
terminated on 15 August, 2017 upon which another contractor was engaged at a contract
sum of Kshs.624,206,006, out of which Kshs.408,654,300 was to undertake completion
of the construction of the County Assembly offices while the balance of Kshs.215,551,706
was to be paid to the sub-contractors. However, following a circular from The National
Treasury on County infrastructure expenditure that set the expenditure limit for County
Assembly offices, the contract sum was set at Kshs.350,771,955 comprising the price of
completion of the County Assembly offices and which was scaled down to
Kshs.259,178,875. An addendum contract agreement was issued on 18 March, 2019
while the contract price for sub-contractor was scaled down to Kshs.91,593,080.
The initial contract completion date was on 15 September, 2019 but was extended to
22 May, 2020. On 10 March, 2021, the main contractor through an unreferenced letter
requested the Clerk for termination of the contract. The Clerk of the County Assembly
terminated the contract on 2 April, 2022. At the date of termination, the value of works
done as per final valuation No. 9 amounted to Kshs.155,985,743 while physical
verification of the project in September, 2023 revealed that works had stalled.
In the circumstances, the value for money of the expenditure Kshs.155,985,743 incurred
on the project could not be confirmed.
6
AND GOVERNANCE
18. Failure to Establish Audit Committee

Review of the internal controls, risk management and governance revealed that no audit
committee had been established. Further, even though the Internal Audit Department had
an audit plan in place, evidence of execution of the plan and the internal audit reports
were not provided for audit review.
In the circumstances, the effectiveness of the internal audit to effectively discharge their
mandate could not be confirmed.
19. Lack of Approved Staff Establishment

Review of records revealed that the County Assembly did not have in place an approved
staff establishment to indicate the authorized staffing levels for each category of
employee and or any variance thereof. Further, no evidence was provided to indicate that
the County Assembly had carried out job evaluation to determine the staff requirements
for each category contrary B.5 (2) of the County Public Service Human Resource Manual
which states that all vacancies shall be declared in a prescribed format which shall
include: the number of vacancies; when the vacancy occurred; whether the vacancy is
within the authorized establishment and other relevant details.
In the circumstances, Management had engaged not the optimal numbers of employees
for all categories.
7
COUNTY ASSEMBLY OF TANA RIVER – NO.4
20. Inaccuracies in the Transfers from the County Treasury/Exchequer Releases
The statement of receipts and payments reflects transfers from the County Treasury
amounting to Kshs.947,412,490 and as disclosed in Note 1 to the financial statements.
Review of the bank statements reflects that an amount of Kshs.997,412,490 was received
out of which an amount of Kshs.702,790,308 was for recurrent vote while the balance of
Kshs.294,622,182 was in respect of development vote. This resulted to a variance of
Kshs.50,000,000 which has not been explained or reconciled. In addition, re-computation
of the corresponding Note 1 to the financial statements reflects receipts amounting to
Kshs.947,210,725 resulting to an unexplained variance of Kshs.201,765
In the circumstances, the accuracy and completeness of transfers from the County
Treasury amounting to Kshs.947,412,490 could not be confirmed.
21. Unsupported Payments on Printing, Advertising and Information Supplies

and Services
statements reflects use of goods and services amounting to Kshs.267,052,885. Included
in the payments is an amount of Kshs.282,180 in respect of printing, advertising and
information supplies and services which involved live coverage on media and printing at
Government Printer. However, the expenditure was not supported with profoma invoice,
local purchase orders/local service orders, and delivery notes.
In the circumstances, the accuracy and completeness of the payments amounting to

Kshs.282,180 could not be confirmed.
Emphasis of Matter
The statement of comparison of budget and actual amounts for recurrent and
development combined reflects final receipts budget and actual on comparable basis
amounting to Kshs.1,113,396,752 and Kshs.947,412,490, respectively resulting in an
underfunding of Kshs.165,984,262 or 15% of the budget. Similarly, the County Assembly
expended Kshs.944,880,399 against an approved budget of Kshs.1,113,396,752
resulting to an under expenditure of Kshs.168,516,353 or 15% of the budget. The
underfunding and underperformance affected the planned activities and may have
impacted negatively on service delivery to the public.
8
23. Pending Bills
Annex 1 to the financial statements reflects a balance of Kshs.2,908,026 in respect of

pending accounts payable which was not paid but carried forward to the subsequent year.
Failure to settle bills during the year in which they relate distorts the financial statements
and adversely affects the budgetary provisions to the subsequent year as they form a first
charge.
My opinion is not modified in respect of these matters.
Other Matter
In the audit report of the previous year, several issues were raised under the report on
financial statements, report on lawfulness and effectiveness in the use of public funds
and report on effectiveness of internal control, risk management and governance.
However, Management had not resolved the issues or given any explanation for failure
to implement recommendations.

RESOURCES
25. Irregularities in the Human Resource Management
statements reflects payments in respect of compensation of employees amounting to
Kshs.318,319,659. Review of payment records revealed the following anomalies;
25.1 Failure to Deduct Service Charge on Third Party Deductions

During the year under review, Management failed to deduct service charge on various
third-party deductions including bank/micro-finance loans, Sacco loans, social welfare
dues and insurance policy premiums resulting to loss in Appropriations-in-Aid during the
year under review contrary to the Ministry of Public Service, circular Ref. No. DPM 23/5A
VOLC XII/ (53) dated 2 May, 2007, which stipulated the charges to be paid by
organizations which receive services from Ministries/Departments in form of payroll by-
products.
25.2 Irregularities of Human Resource Management Practices
Review of personnel records and Integrated Personnel and Payroll Database (IPPD)
revealed that the County Assembly had a gender distribution of fifty-five (55) or 73% male
and twenty (20) or 27% female which contravenes the two-thirds gender rule. There was
no evidence to show that persons with disabilities were represented in the work force
9
contrary to Article 232(1) of the Constitution, 2010 which directs that the values and
principles of public service include affording adequate and equal opportunities for
appointment, training and advancement, at all levels of the public service, of men and
women; the members of all ethnic groups and persons with disabilities.
26. Undisclosed Pending Staff Payables
The Employment and Labour Relations Court at Malindi ruled in favour of an employee
who had sued the County Assembly, the Clerk and three other persons. The Clerk was
ordered to pay the petitioner his salary and general damages amounting to
Kshs.2,500,000 as compensation for violation of his rights which was awarded by the
court. However, the Management has not disclosed in the financial statements the
amount as pending staff payables.
27. Outstanding Account Receivables Balance
The statement of financial assets and liabilities and as disclosed in Note 14 to the financial
statements reflects a balance of Kshs.2,386,800 in respect of accounts receivables –
outstanding imprests. Although Management explained that the imprests had since been
surrendered, evidence of the surrenders were not provided for audit review contrary to
Regulation 93(5) of the Public Finance Management (County Governments) Regulations,
2015 which states that a holder of a temporary imprest shall account or surrender the
imprest within seven (7) working days after returning to duty station.
28. Failure to Adhere to Budget Timelines
Review of the budget documents revealed that the budget estimates for the year ending
30 June, 2023 were submitted to the County Assembly on 5 June, 2023. Further, the
budget was passed by the County Assembly on 17 October, 2022 contrary to Section 129
(2) of the Public Finance Management Act, 2012 which states that following approval by
the County Executive Committee, the County Executive Committee Member for Finance
shall submit to the County Assembly the budget estimates, supporting documents, and
any other bills required to implement the budget, except the Finance Bill, by the 30 April
in that year and Section 131 of the Act which states that the County Assembly shall
consider the County Government budget estimates with a view to approving them, with
or without amendments, in time for the relevant appropriation law and any other laws
required to implement the budget to be passed by the 30 June in each year.
29. Non-Compliance with Payment of Statutory Dues
During the year under review an amount of Kshs.1,000,000 was paid to National Social
Security Fund (NSSF) as part settlement of arrears of members contribution which were
10
deducted but not remitted following an NSSF demand notice dated 28 January, 2021. The
demand notice was for an amount of Kshs.11,620,450 comprising of Kshs.5,296,000 in
arrears (late payments) and accrued penalties amounting to Kshs.6,310,240, billed on a
rate of 5% per month since September 2015. Management requested for a waiver from
the National Social Security Fund on 9 June, 2021 and committed to pay Kshs.500,000
every month from 25 June, 2021 to 25 May, 2023 and after which a final payment of
Kshs.120,450 will be made. However, only an amount of Kshs.1,000,000 was paid in two
equal disbursements in February and April, 2023 thus exposing the County Assembly to
more fines and penalties contrary to Section 53(A) of the Retirement Benefits Act, 2012.

AND GOVERNANCE

30. Lack of Organizational Strategic, Disaster Recovery and IT Strategic Plans
During the year under review, Management had not developed an organizational strategic
plan, a disaster recovery plan and IT strategic plan contrary to the provisions of
Regulation 158(1) of the Public Finance Management (County Governments)
Regulations, 2015 which require the Accounting Officer to ensure that the County
Government entity develops risk management strategies, which include fraud prevention
mechanism and a system of risk management and internal control that builds robust
business operations.
In the circumstances, it may not be possible for Management to focus on their goals and
objectives.
31. Ineffective Human Resources Practices
Review of human resources records, revealed that the approved staff establishment was
ninety-two (92) employees. However, review of records revealed that as at the time of
audit, the County Assembly had seventy-five (75) employees which represents overall
understaffing of seventeen (17) employees. Ten (10) departments were understaffed by
twenty-two (22) employees while four (4) departments were overstaffed by five
employees.
Further, Management had not undertaken performance appraisal on their staff while
review of the June, 2023 payroll indicated that seven (7) of the seventy-three (73)
employees of the organization only had 7 years of service before retirement and no proper
succession management had been put in place.
In addition, Management had not developed a skills inventory for all officers in their
respective departments.
In the circumstances, it may not be possible for Management to attain their goals and
objectives.
11
32. Processing of Salaries and Allowances Outside the Integrated Personnel and
Payroll Database (IPPD)
The statements of receipts and payments reflects compensation of employees amount of
Kshs.318,319,659 as disclosed in Note 4 to the financial statements. However, payments
in respect of basic salaries to permanent employees amounting to Kshs.28,954,480 were
paid outside the Integrated Personnel and Payroll Database (IPPD). No explanations
were provided for the processing of the wages outside the IPPD system.
In the circumstances, existence of an effective control in management of compensation

of employees could not be confirmed.
12
COUNTY ASSEMBLY OF LAMU – NO.5

33. Inaccuracies of Cash and Cash Equivalents Balance
The statement of financial assets and liabilities reflects a balance of Kshs.41,209,560 in

respect to cash and cash equivalents and as disclosed in Note 6A to the financial
statements. However, the balance includes an amount of Kshs.40,399,995 in respect of
car loan and mortgage Fund. Further, review of the Integrated Financial Management
Information System (IFMIS) bank reconciliation statements revealed that the County
Assembly’s recurrent account was overdrawn by Kshs.85,945,356 as at 30 June, 2023
while the cash book reflected a balance of Kshs.806,314. Management attributed the
discrepancy between the two set of records to prior year adjustments in IFMIS which were
corrected due to lack of adequate IFMIS training and limited user rights.
In the circumstances, the accuracy and completeness of cash and cash equivalents
balance of Kshs.41,209,560 could not be confirmed.
34. Unsupported Payments to Ward Offices and Casual Workers
The statement of receipts and payments and Note 2 to the financial statements reflects
payments totalling Kshs.164,400,820 in respect of compensation of employees which
includes payments amounting to Kshs.1,830,000 in respect of casual workers in ten (10)
Ward offices for the month of November, 2022. However, the payment was not supported
by a list of beneficiaries and a signed muster roll. Further, an amount of Kshs.345,000
was transferred to each of the ten (10) Wards which translates to a total of
Kshs.3,450,000. However, the expenditure returns supporting these transfers were not
provided for audit review.
In the circumstances, the accuracy, completeness and propriety of payments amounting

to Kshs.5,280,000 could not be confirmed.
Emphasis of Matter
The statement of comparison of budget and actual amounts reflects final receipts budget
and actual on comparable basis totalling Kshs.564,250,000 and Kshs.362,476,400
respectively resulting to an underfunding of Kshs.201,773,600 or 36% of the budget.
Similarly, the statement reflects expenditure budget and actual on comparable basis of
Kshs.564,250,000 and Kshs.361,376,637 respectively resulting to budget underutilization
of Kshs.202,873,363 or 36%. The underfunding and underperformance affected the
planned activities and may have impacted negatively on service delivery to the public.
13
36. Late Exchequer Releases
The statement of receipts and payments and Note 1 to the financial statements indicate
that the County Assembly received Exchequer receipts totalling Kshs.362,476,400 from
the County Revenue Fund. However, included in this amount are late disbursements
totalling Kshs.61,483,700 received in the month of June, 2023. Failure by the County
Treasury to release money on time may have negatively impacted on service delivery by
the County Assembly.
Other Matter
Various prior year audit issues remained unresolved as at 30 June, 2023. Management
has not provided reasons for the delay in resolving the prior year audit issues. Further,
the unresolved prior year issues are not disclosed under the progress on follow up of
auditor’s recommendations section of the financial statements as required by the
reporting template prescribed by the Public Sector Accounting Standards Board.

RESOURCES
38. Irregular Payment of Car Purchase Allowances
During the year under review, Management paid a total of Kshs.22,120,000 in respect of
car purchase allowances to the Members of County Assembly (MCAs) of Lamu. This was
contrary to part 2(m) of Kenya Gazette Notice Number 8795 dated 27 July, 2022 on
remuneration and benefits for state officers in the County Assembly which states that
transport facilitation benefit in form of a car grant has been abolished and ceased to be
paid with effect from 9 August, 2022.
39. Long Outstanding Imprest
The statement of financial assets and liabilities and Note 7 to the financial statements
reflect a balance of Kshs.294,000 in respect of imprests and advances. However, review
of records revealed that the imprests had been outstanding for five (5) months contrary
to Regulation 93(5) of the Public Finance Management (County Governments)
Regulations, 2015 which requires a holder of a temporary imprest to account or surrender
the imprest within seven (7) working days after returning to duty station.
14
40. Failure to Deduct and Effect the New NSSF Rates
Review of the Integrated Payroll and Personnel Database (IPPD) revealed that
Management did not make deductions to the National Social Security Fund (NSSF) from
one hundred and thirteen (113) members of staff. Further, the new NSSF rates had not
been affected as guided by a Gazette Notice dated 9 February, 2023.
41. Irregular Payment to Society of Clerks at the Table
The statement of receipts and payments reflects payments totalling Kshs.151,137,818 in

respect to use of goods and services which, as disclosed in Note 3 to the financial
statements includes other operating expenses of Kshs.3,242,805. This amount in turn
includes Kshs.750,000 paid to Society of Clerks at the Table during the year under review.
However, no legal framework supporting this expenditure was provided for audit review.
42. Unauthorized Reallocation of Expenditure
The statement of receipts and payments reflects payments totalling Kshs.361,376,637.

However, payments in respect of eleven (11) budget line items totalling Kshs.139,301,500
had an allocated budget of Kshs.85,162,000 resulting to unauthorized reallocation of
Kshs.54,139,500. This was contrary to Section 147(1)(d) of Public Finance Management
Act, 2012 which states that subject to the Constitution, the Accounting Officer of a County
Assembly shall monitor, evaluate and oversee the management of their public finances,
including ensuring proper management and control of, and accounting for, their finances
in order to promote the efficient and effective use of budgetary resources.

AND GOVERNANCE
43. Lack of Risk Management Policy
During the year under review, Management had not developed a risk management policy.
Further, Management did not carry out risk assessment during the year under review.
In the circumstances, the effectiveness of risk management system in the County

Assembly could not be confirmed.
44. Delayed Implementation of Projects

During the year under review, the County Assembly of Lamu had budgeted to implement
four (4) projects at a total cost of Kshs.94,800,000. The County Assembly made payments
15
totalling Kshs.18,837,999 towards the implementation of the projects. However, none of
the project was fully implemented.
In the circumstance, value for money could not be ascertained from the expenditure of
Kshs.18,837,999.
45. Lack of Internal Audit Function and an Audit Committee of the Board
The County Assembly of Lamu had not established an internal audit function and an
Audit Committee of the Board. This was contrary to Section 155 of the Public Finance
Management Act, 2012 which provides for the establishment of the internal audit
function and an Audit Committee of the Board. As such, the County Assembly did not
benefit from the assurance and advisory services from the internal audit function as well
as oversight from the Audit Committee.
In the circumstances, the effectiveness of internal control systems established by the

County Assembly could not be confirmed.
16
COUNTY ASSEMBLY OF TAITA/TAVETA – NO.6
46. Unsupported Expenditures - Use of Goods and Services

As disclosed in Note 5 to the financial statements, the statement of receipts and payments
reflects use of goods and services amount of Kshs.325,049,151. However, the following
unsatisfactory matters were noted: -
46.1.1 Unsupported Travel and Subsistence Expenditure
The amount includes expenditures of Kshs.144,230,513 and Kshs.58,184,103 on

domestic and foreign travel and subsistence respectively. Review of expenditure
documents revealed expenditure on domestic travel and subsistence and foreign travel
and subsistence of Kshs.12,915,200 and Kshs.17,515,726, respectively all totalling
Kshs.30,430,926 were not supported with evidence of; ratification of the Board’s transport
allowances by Salaries Remuneration Commission (SRC), competitive selection of the
training facilities and user departments’ requests.
46.1.2 Routine Maintenance Expenses on Motor Vehicles
Further, included in the amount for use of goods and services is an amount of
Kshs.5,154,331 spent on routine maintenance of vehicles and other transport equipment.
Review of records provided revealed that the County Assembly made payments for motor
vehicle repairs, service and maintenance expenses amounting to Kshs.7,692,379, which
was more than the amount of Kshs.5,154,331 reflected in the financial statements by an
unexplained variance of Kshs.2,538,048. Further, included in the expenditure of
Kshs.7,692,379 is an amount of Kshs.1,914,468 that was not supported with inspection
reports and evidence of competitive sourcing of the service providers.
46.1.3 Insurance Costs
The amount for use of goods and services also includes an amount of Kshs.34,473,901
in respect of insurance costs. Review of records revealed that the County Assembly made
payments for motor vehicles insurance amounting to Kshs.1,000,000 as settlement of a
pending bill on insurance cover for the financial year 2018/2019. However, Management
did not provide the policy document or contract detailing the motor vehicles insured, their
valuations and cover class taken during the period.
46.2 Legal Expenses
statements reflect an expenditure on other payments amounting to Kshs.76,984,855
which includes an amount of Kshs.7,213,501 incurred on settling pending legal expenses.
Review of records provided revealed that the County Assembly paid an amount of
Kshs.4,000,000 to three (3) private legal service providers. However, Management did
17
not provide evidence of how the service providers were identified, selected and fees
determined for audit verification.
In the circumstances, the accuracy and completeness of expenditure amounting to

Kshs.42,479,725 could not be confirmed.
47. Irregular Foreign Travel and Subsistence Expenses
The statement of receipts and payments and Note 5 to the financial statements reflect
use of goods and services balance of Kshs.325,049,151 which includes an amount of
Kshs.58,184,103 incurred on foreign travel and subsistence. The latter amount further
includes an expenditure of Kshs.8,037,599 incurred by the Members of Taita/Taveta
County Assembly on a pre-conference, leadership training and study tour in Zanzibar for
a period of six (6) days.
Review of records revealed that the County Assembly facilitated twenty-five (25) MCA’s
and five (5) members of staff for the travel and paid a total amount of Kshs.8,037,599 as
per diem. Further, an additional expenditure amounting to Kshs.9,116,800 was incurred
in respect of registration of members, administration, conference charges, coordination
and training costs.
Examination of records provided for audit in respect of the trip revealed following
anomalies:
i) Included in the amount of Kshs.8,037,599 travel and subsistence expense is an

expenditure of Kshs.238,000 paid as transport costs. However, the participants
had been facilitated at the rate of Kshs.85,600 per person. Management did not
explain the purpose of Kshs.238,000 transports costs incurred.
ii) The County Assembly incurred additional conference, catering and training costs
of Kshs.9,116,800. However, audit review of the procurement process indicated
that the County Assembly used the direct procurement method to source for the
services contrary to Section 158 of the Public Procurement and Asset Disposal
Regulations, 2020.
iii) Out of the twenty-five (25) MCA’s facilitated for the travel, four (4) Members did not
travel to Zanzibar despite having been paid the allowances amounting to
Kshs.1,141,809. Management did not provide evidence of the subsequent refund
of the amounts paid to the participants who did not travel after a request for the
refund was done.
iv) Review of the travel documents of the participants indicated that they were eligible
for five (5) days per diems but had been paid for six (6) days per diem resulting in
one extra (1) day per diem overpayment to each of the participants. Management
did not provide evidence that the overpayment had been recovered or refunded by
the beneficiaries.
v) Available information indicated that the Ethics and Anti-Corruption Commission

had carried out investigations on the matter and from their report, participants were
provided with full accommodation during the trip and had also been paid full per
18
diem allowance leading to double compensation. The Commission through
demand letters required the delegates to refund the extra payments made to the
Commission’s bank account. However, Management did not provide any
confirmation that the refund was done as per the Commission’s demand letters.
In the circumstances, the regularity of the foreign travel and subsistence expenses of
Emphasis of Matter
The statement of comparison of budget and actual amounts (recurrent and development
combined) reflects final receipts budget and actual amounts on comparable basis of
Kshs.1,033,022,686 and Kshs.902,223,168 respectively, resulting in under-funding of
Kshs.130,799,518 or 13% of the budget. Similarly, the County Assembly expended
Kshs.896,622,657 against an approved budget of Kshs.1,033,022,686, resulting in an
under-expenditure of Kshs.136,400,029 or 13% of the budget. The under-funding and
under-expenditure affected the planned activities and may have impacted negatively on
service delivery to the public.
Other Matter
49. Unresolved Prior Year Issues
Financial Statements, Report on Lawfulness and Effectiveness in Use of Public
Resources, and Report on Effectiveness of Internal Controls, Risk Management and
Governance. However, Management has not provided reasons for the delay in resolving
the audit issues.

RESOURCES

50. Non-Compliance with the Law on Staff Ethnic Composition
Review of human resources records provided revealed that the County Assembly has a
workforce of one hundred and thirty-four (134) staff out of which one hundred and six
(106) or 79% are from the dominant local community. This was contrary to the
requirements of Section 7(2) of the National Cohesion and Integration Act, 2008 which
stipulates that no public establishment shall have more than one third of its staff from the
same ethnic community.
19
51. Irregular Re-designation of Staff
Review of records in respect of the County Assembly Services Board (CASB) meeting
held on 21 January, 2023 revealed that the Board resolved to re-designate some County
Assembly employees from the current designations to new designations.
However, analysis of the re-designation of the employees revealed the following

anomalies:
i. Management did not provide evidence that the Board acted following
recommendation by the Management Committee and the Staff Advisory
Committee since the committees were not operational during the time of effecting
the re-designation.
ii. Management did not provide evidence that the re-designations were based on
suitability interviews done and report on suitability of employees re-designated to
and from various cadres requiring professional competence e.g. procurement, ICT
and research assistants, were not provided.
iii. The Board resolved and re-designated 16 employees, whereby five (5) staff in job
groups P, L, Q and N were re-designated into positions higher than two (2) entry
level cadres of the positions they were re-designated to. This was contrary to
section C.2.3(a)(2) of the Taita/Taveta County Assembly Human Recourses
Policies and Procedures Manual, 2019.
iv. Two employees in job groups K and N lodged complaints on being re-designated.
Management did not provide evidence that the employees consented to the re-
designation as required by Section C.2.3(c) of the Taita Taveta County Assembly
Human Resources Policies and Procedures Manual, 2019.
In the circumstances, the effectiveness of internal controls relating to human resources

management and governance could not be confirmed.
20
COUNTY ASSEMBLY OF GARISSA – NO.7
52. Unsupported Expenditure
The statement of receipts and payments reflects use of goods and services expenses
amounting to Kshs.267,466,506 as disclosed in Note 3 to the financial statements.
However, the following unsatisfactory matters were noted: -
52.1 Domestic Travel and Subsistence Expenses
The balance includes domestic travel and subsistence allowances expenditure

amounting to Kshs.111,448,481. Review of records provided revealed that an amount of
Kshs.5,834,300 was paid to officers who attended workshops, training and other official
duties outside Garissa County. However, payments were not supported with invitation
letters, pre-travel approval by the management, training programs for the training
attended and workshop attendance registers. In some instances, the mode of transport
used was not indicated since the payments were not supported by bus tickets, work
tickets or air tickets.
52.2 Training Expenses
Further, the payment includes training expenses amounting to Kshs.47,388,116. Review

of records revealed training expenses totalling Kshs.500,000 which was not supported by
training attendance registers, payment schedules signed by recipients of training
allowances, invitation letters or nomination letters to attend the training.
52.3 Payment of Security Allowance
In addition, the payments includes other operating expenses amounting to

Kshs.38,696,849. The other operating expenses includes security allowances in respect
of National Police Security Services totalling Kshs.5,888,500 expenses. Review of
records provided revealed that security allowances totalling Kshs.1,410,500 were not
supported with requisition letters and need assessment reports. Further, the criteria and
scope of security engagement, rates of remuneration and mode of payment for the
security services provided as well as approval from the County Assembly Service Board
to engage National Police Service security services was not provided for audit.
In the circumstances, the accuracy, completeness and regularity of payments amounting
21
Emphasis of Matter
53. Pending Bills
Other Disclosures Note 1 to the financial statements reflects pending accounts payables
amounting to Kshs.52,926,876 as further disclosed in Annex 1 to the financial statements.
Management has not explained why the bills were not settled during the year when they
occurred. Failure to settle bills during the year to which they relate to distort the financial
statements and adversely affects the budgetary provisions for the subsequent year as
they form a first charge.
My opinion is not modified in respect to this matter.
Other Matter
Governance. However, the Management has not resolved the issues or given any
explanation for failure to adhere to the provisions of the Public Sector Accounting
Standards Board templates.

RESOURCES
55. Irregular Payment of Subscriptions
The statement of receipts and payments reflects use of goods and services amounting to
Kshs.267,466,506. The amount includes other operating expenses totalling
Kshs.38,696,849 as disclosed in Note 3 to the financial statements. The other operating
expenses includes subscription fees amounting to Kshs.750,000 paid to the Society of
Clerks at the Table (SOCATT). This was contrary to Section 37 of the Intergovernmental
Relations Act, 2012 which requires operational expenses of the institution established
under the Act to be incurred by them.
56. Compensation of Employees
56.1 Non-Remittance of Statutory Deductions
The statement of receipts and payments reflects compensation of employees amounting

to Kshs.550,785,416 as disclosed in Note 2 to the financial statements. The amount
includes pension and other social security contributions totalling Kshs.39,201,576. The
pension and other social security contributions include remittance totalling
22
Kshs.31,697,893 for the financial year 2021/2022. Review of records provided revealed
that salary deductions amounting to Kshs.34,813,941 were made in respect of
employees’ contributions to pension scheme (LAPTRUST). However, only
Kshs.7,503,683 was remitted leaving a balance of Kshs.27,310,258 not remitted.
Further, the County Assembly failed to implement the New National Social Security Fund
(NSSF) Act No.45 of 2013 that took effect on 24 February, 2023 which provides that
NSSF pension contributions be raised to twelve per cent (12%) of the pensionable wages,
with the employer contributing six per cent (6%) of the employee's monthly pensionable
earnings and the employee contributing six per cent (6%) of the employee's pensionable
earnings deducted from the employee's earnings.
56.2 Over Employment of Staff in the County Wards’ Offices
The compensation for employees’ expenditure amounting to Kshs.550,785,416 includes

basic wages of temporary employees’ expenses totalling Kshs.47,377,467. Review of
records revealed that the County Assembly employed a total of two hundred and
seventeen (217) partisan staff. This was contrary to the Commission of Revenue
Allocation (CRA) Circular No. CRA/CSO/CMG/9/VOL.V(43) dated 3 August, 2020 which
allows a maximum of one hundred and fifty (150) partisan staff resulting to over
employment of sixty-seven (67) non-partisan staff.
56.3 Non-Compliance with Staffing Level Ceiling
Included in the compensation of employees’ expenditure of Kshs.550,785,416 is basic

salaries of permanent employee’s expenses amounting to Kshs.47,377,467. Review of
personal records revealed that the County Assembly had one hundred and eleven (111)
employees. This was contrary to Commission on Revenue Allocation Circular No.
CRA/FA/01 VOL 11 (22) dated 28 June, 2018 which limited number of employees to one
hundred (100) resulting in unauthorized employment of eleven (11) members of staff.
56.4 Non-Compliance with County Assembly’s Wage Bill Above 35% Threshold

to Kshs.550,785,416 which is approximately 60.1% of the total revenue totalling
Kshs.903,302,421. This was contrary to Regulation 25(1)(b) of the Public Finance
Management (County Governments) Regulations, 2015 which states that the staff
expenditure on wages and benefits should not exceed thirty-five percent (35%) of the
County Government’s total revenue.
57. Unsupported Payments on Printing, Advertising & Information Supplies and

Services
The statement of receipts and payments reflects use of goods and services balance of
Kshs.267,466,506 which, as disclosed in Note 3 to the financial statements includes
printing, advertising, information supplies and services expenditure amounting to
Kshs.6,166,041. Review of records revealed that printing services were procured for
23
Kshs.246,400 using low value procurement. However, the expenditure was not supported
by Electronic Tax Register (ETR) receipts signed by the officer undertaking the cash
purchases. Further, printing service procured of Kshs.165,000 exceeded the maximum
allowable threshold of Kshs.50,000.

AND GOVERNANCE
Conclusion
governance.
24
COUNTY ASSEMBLY OF WAJIR – NO.8
59. Overpayment of Mileage Allowance
Kshs.300,499,158. Review of sample payments amounting to Kshs.70,036,181 in respect
of mileage claims by the Members of County Assembly (MCAs), and based on actual
distances from Wajir town to the respective wards as provided by the Ministry of
Transport, revealed that the MCAs were entitled to reimbursement amount of
Kshs.4,636,424. However, the actual amount paid for mileage claims was
Kshs.11,119,744, resulting into an over-payment of Kshs.6,483,320.
In the circumstances, the propriety and accuracy of the payments of Kshs.6,483,320

could not be confirmed.
60. Failure to Establish Imprest Facility
As disclosed in Note 3 to the financial statements, the statement of receipts and payments
reflects use of goods and services amount of Kshs.300,499,158 which includes amount
of Kshs.6,961,400 on hospitality, supplies and services. Examination of payment
vouchers and other supporting documents revealed that out of the Kshs.6,961,400 an
amount of Kshs.3,052,000 was in respect of cash purchases for office supplies by officers
who later sought reimbursements of the amount spent. The officers financed the
operations of the County Assembly using their own resources without an approved
established imprest facility intended to be in operation as required by Regulations 92(1)
and 93(11) of the Public Finance Management (County Governments) Regulations, 2015.
In the circumstances, the propriety and accuracy of the expenditure amounting to

Other Matter
61. Prior Year’s Audit Issues
Standards Board templates.
25
RESOURCES
62.1 Non-Compliance with Limit on Compensation of Employees
During the year under review, a total of Kshs.514,297,122 was paid in respect of
compensation of employees. This represents 61% of the total revenue received of
Kshs.846,725,953, contrary to Regulation 25(1)(a)(b) of the Pubic Finance Management
(County Governments) Regulations, 2015 which requires the County Executive
Committee Member with the approval of the County Assembly set a limit on the County
Government’s expenditure on wages and benefits for its officers and the limit set shall not
exceed thirty-five percent (35%) of the County Government’s total revenue.
62.2 Payment of Salary Using Manual Payroll
During the year under review, a total of fifty-five (55) employees were paid gross amount
of Kshs.47,345,736 through a manual excel spreadsheet-based payroll system. Among
these employees, forty-nine (49) were migrated to an Integrated Personnel Payroll
Database (IPPD) between the months of January and May, 2023. However, nine (9) of
them, with a total gross pay of Kshs.1,134,726, continued to be processed through the
manual payroll system contrary to Regulation 19(1)(d) of the Public Finance Management
(County Governments) Regulations, 2015 that requires integrity of the entity's internal
control and management information systems, and Section 1.5.1 of The National
Treasury financial accounting recording and reporting manual that directs salaries,
allowances and/or arrears of County Government entity staff are presented on the
Integrated Personnel Payroll Database.
62.3 Non-Compliance with Staffing Level Ceiling
Review of payroll records for the year ended 30 June, 2023, revealed that the County
Assembly employed a total of one hundred and seventy-seven (177) employees. This
was contrary to the Commission on Revenue Allocation (CRA) recommendation Circular
No. CRA/FA/01 VOL 11 (22) dated 28 June, 2018 which specified a maximum 4 of one
hundred (100) on the number of employees for County Assemblies categorized under
group 2, to which the County Assembly of Wajir belongs. The County Assembly
surpassed the allowable number of employees by seventy-seven (77).
62.4 Staff Medical Insurance Cover
During the year under review, examination of records revealed that the County Assembly
of Wajir paid Kshs.37,376,521 to an Insurance Company as premium for the period
10 January, 2023 – 9 January, 2024 in respect of staff medical insurance cover.
26
However, the County Assembly did not pay premiums in advance contrary to clause 6.3
of the terms and conditions of payment of the contract which requires premium shall be
made in one lump sum on contract signing and Section 156(1) of the Insurance Act
revised February, 2020 which requires that no insurer shall assume a risk in Kenya in
respect of insurance business unless and until the premium payable thereon is received
by the insurer. Further, the accounting officer did not provide for audit the quarterly report
of the varied procurement contract submitted to the Public Procurement Regulatory
Authority as required by Section 139 (5) of the Public Procurement and Asset Disposal
Act, 2015.
63. Use of Goods and Services
63.1 Failure to Tax Motor Vehicle Reimbursement
During the year under review, Management made payments totalling Kshs.99,540,000 in
respect of motor vehicle reimbursement to Members of the County Assembly. However,
review of records revealed that income tax dues amounting to Kshs.29,862,000 was not
deducted contrary to Section 3(1)(2) of the Income Tax Act which requires income tax be
charged upon all income of a person in respect of gains or profits from employment or
services rendered.
63.2 Irregular Payment to the County Assembly Forum and Clerks Society
The statements of receipts and payments reflects balance of Kshs.300,499,152 under

use of goods and services which includes and amount of Kshs.5,450,000 being
subscriptions to County Assemblies Forum and Society of Clerks. However, the two (2)
entities are not established in law and the payments may have been done irregularly.

AND GOVERNANCE
64. Summary of Fixed Assets
Annex 4 to the financial statements on summary of fixed assets reflects Kshs.97,271,921
in respect of assets owned by the County Assembly as at 30 June, 2023. However, motor
vehicle logbooks and land title document were not provided for audit review. Further,
physical inspection carried out on the assets revealed that the County Assembly has not
tagged/branded its assets as required under Regulation 132(1) of the Public Finance
Management (County Governments) Regulations, 2015 that requires Accounting Officer
to ensure proper control systems exist for assets to prevent theft, security threats, losses,
wastage and misuse and also ensure movement and conditions of assets can be tracked.
In addition, the land and buildings owned by the County Assembly were not recorded in
the fixed asset register.
27
In the circumstances, the effectiveness of internal controls on management of assets of
the County Assembly could not be confirmed.
65. Internal Controls and Governance
65.1 Weakness in Internal Control – Lack of Information Technology Strategy
During the year under review, Management did not establish Information Technology (IT)
strategy and IT steering Committee, IT policy, disaster management and recovery
policies, business continuity plan and IT continuity plan and risk management policy to
ensure smooth running of its operations.
In the circumstances, lack of IT Steering Committee, IT Policy, Disaster Management and

recovery policies exposed the County Assembly to loss of vital information which could
affect the smooth running of the County Assembly’s operations.
65.2 Failure to Establish Audit Committee
The County Assembly has not established an Audit Committee as required under Section
155(5) of the Public Finance Management Act, 2012 to support the accounting officers
with regard to their responsibilities for issues of risk control, governance and associated
assurance.
In the circumstances, Management lacked guidance in governance and oversight in the

management of the County Assembly operations.
65.3 Non-Functional Internal Audit Function
Review of the operations of the Internal Audit Department revealed that the County
Assembly had an internal audit unit in place. However, during the year under review, the
Department did not prepare any report and Annual Plan, contrary to provisions of
Regulation 155(2)(a) of the Public Finance Management (County Governments)
Regulations, 2015, which provides that an Accounting Officer shall ensure that the
organizational structure of the internal audit unit facilitates the entity to accomplish its
internal audit responsibilities.
In the circumstances, the effectiveness of the internal audit function to discharge their
mandate could not be confirmed.
28
COUNTY ASSEMBLY OF MANDERA – NO.9
66. Unsupported Domestic Travel and Subsistence Allowances
statements reflects use of goods and services balance of Kshs.279,413,929 which
includes domestic travel and subsistence allowances amount of Kshs.70,071,133.
However, payments amounting to Kshs.2,842,000 were not supported by invitation
letters, nomination letters to the participating staff, copies of certificates of participation
and signed expenditure schedules with details of job groups based on the applicable
rates.
subsistence allowances amounting to Kshs.2,842,000 could not be confirmed.
Emphasis of Matter
The statement of comparison of budget and actual amounts reflects total receipts budget
and actual on comparable basis of Kshs.1,162,343,708 and Kshs.927,322,403
respectively, resulting in an under-funding of Kshs.235,021,305 or 20% of the budget.
Similarly, the statement reflects final budgeted payments and actual on comparable basis
of Kshs.1,162,343,708 and Kshs.927,320,029 resulting in under-absorption of
Kshs.235,023,679 or 20 % of the budget. The under-funding and under-absorption
affected the planned activities and may have impacted negatively on service delivery to
the public.
Further, the County Assembly received late disbursements totalling Kshs.252,000,001 in

the month of June, 2023 or 27% of total receipts thus negatively affecting implementation
of budgeted programs and activities to the detriment of the public citizen.
Other Matter
explanation for failure to do so, as part of the contents provided for in the reporting format
prescribed by the Public Sector Accounting Standards Board.
29
REPORT ON LAWFULNESS AND EFFECTIVENESS IN THE USE OF PUBLIC
RESOURCES
of Kshs.279,413,929 which, as disclosed in Note 3 to the financial statements, includes
other operating expenses amount of Kshs.41,137,171 out of which, amount of
Kshs.4,450,000 and Kshs.750,000 were paid to the County Assembly Forum (CAF) and
Society of Clerks at The Table in Kenya (SOCATT(K)) respectively as subscription fees.
However, the payments lacked legal backing or supporting policy guidelines.
70. Non-Compliance with Ward Partisan Staffing Levels
Review of the records revealed that the County Assembly employed a total of two hundred
(200) partisan staff for the wards against the set limit of one hundred and forty-four (144)
as per circular number CRA/CSO/CMG//9/VOLV/59 dated 21 October, 2020 on Advisory
of Ward Offices Operation Costs from the Commission on Revenue Allocation.
71. Unutilized Speaker’s Residence
During the year under review an amount of Kshs.2,028,303 was paid to the contractor as
final payment on the construction of the Speaker’s residence. The proposed construction
of the Speaker’s residence for Mandera County Assembly was constructed at a total cost
of Kshs.55,811,842 and a completion certificate was issued on 26 August, 2021 in respect
of the project. Physical inspection conducted in the month of November, 2023 revealed
that the project was complete but not in use.
In the circumstances, the value for money on the expenditure of Kshs.55,811,842

incurred on the construction of the Speaker’s residence could not be confirmed.

AND GOVERNANCE

72. Lack of Disaster Recovery Plan
During the year under review, Management did not carry out a risk assessment and did
not develop risk management strategies, systems of risk management and internal
controls that build robust business operations. Further, the County Assembly did not have
an appropriate Disaster Recovery Plan, DRP.
In the circumstances, the existence of an effective mechanism to safeguard against and
disruption of services could not be confirmed.
30
COUNTY ASSEMBLY OF MARSABIT – NO.10

Unqualified Opinion
73. There were no material issues noted during the audit of the financial statements.
Emphasis of Matter
The statement of comparison of budget and actual amounts recurrent and development
reflects final receipts budget of Kshs.1,229,994,164 and actual receipt of
Kshs.956,446,603 resulting to underfunding of Kshs.273,547,561 or 22 % of the budget.
Similarly, the statement reflects total actual expenditure of Kshs.954,192,752 against an
approved budget of Kshs.1,229,994,164 resulting to an under-expenditure of
Kshs.275,801,412 or 22% of the budget.
The underfunding and under-performance affected the planned activities and may have
negatively impacted on service delivery to the public.
Other Matter
In the audit reports of previous year, several issues were raised under the Report on
Financial Statements, Report on Lawfulness and Effectiveness in use of Public
Governance. However, Management has not resolved the issues or given any
explanation for failure to adhere to the provisions of the standards prescribed by the
Public Sector Accounting Standards Board.

RESOURCES
76.1 Irregular Payment of Special House Allowance
statements reflects compensation of employees amount of Kshs.217,962,746 which
includes a balance of Kshs.503,100 paid in respect to special house allowance to nine
(9) employees. The payments were, however, contrary to the terms and conditions of
31
service as determined by SRC through Circular Ref. No SRC/ADM/1/13 Vol. III (126) of
10 December, 2014 that does not permit the payment of the special house allowance.
76.2 Non-Compliance with the One-Third of Basic Salary Rule
During the year ended 30 June, 2023, fourteen (14) employees earned a net salary of
less than a third (1/3) of the basic salary contrary to Section C.1(3) of the Public Service
Commission (PSC) Human Resource Policies, 2016. Management has not given an
explanation for the failure to comply with the policy.
76.3 Employees on Probation for More than Six Months
On 20 June, 2022 the County Assembly recruited twenty (20) members of staff who have
been on probation terms more than six months’ contrary to Section 42(2) of the
Employment Act, 2007 which provides that a probationary period shall not be more than
six months but it may be extended for a further period of not more than six months with
the agreement of the employee.
77. Irregular Expenditure to Society of Clerks at the Table – SOCCAT
The statement of receipts and payments reflects other grants and transfers balance of
Kshs.5,500,000 which, as disclosed in Note 8 to the financial statements includes an
amount of Kshs.1,500,000 paid to the Society of Clerks at The Table (SOCATT).
However, a review of the SOCATT revealed that this body is a private organization that
does not draw its mandate from the Constitution of Kenya or an Act of Parliament.
78. Delay in Project Completion - Construction of Chambers
statements reflects Kshs.110,588,124 in respect of acquisition of assets which includes
Kshs.87,221,446 for construction of buildings. The amount includes a payment of
Kshs.13,765,155 paid to a construction company for the construction of chambers for the
County Assembly of Marsabit. Review of procurement records revealed that the County
Assembly awarded the tender to a firm at a contract sum of Kshs.344,205,660 for a period
of seventy (70) weeks. The Chambers was to be completed by 28 August, 2019,
verification of the works in October, 2023 revealed that the works were still ongoing, four
(4) years past the completion date.
However, the approval of the extension of the project duration beyond 28 August, 2019
were not provided for audit.
32
Further, the County Assembly did not provide evidence that the Project Management and
other stakeholders including representatives of the County Assembly held site meetings
to assess the implementation of the project and confirm the metrics during the engineers
visit to give valuation certificates for payments. This was contrary to Section 149(1)(a)
and (b) of Public Finance Management Act, 2012 which provides that an Accounting
Officer is accountable to the County Assembly for ensuring that the resources of the entity
for which the officer is designated are used in a way that is lawful and authorized; and
effective, efficient, economical and transparent.
In the circumstances, it was not possible to confirm whether the County Assembly
obtained value for money from the expenditure of Kshs.13,765,155 incurred on the
project.
79. Non-Establishment of a County Assembly Fund
The County Assembly Service Board had not established a County Assembly Fund. This
was contrary to Section 34 of the County Assembly Service Act, 2017 which provides that
there shall be established for each County, a fund to be known as the County Assembly
Fund, whose purpose is to receive any grants, gifts, donations or bequests; monies from
investments of the Board and such fees imposed or levies administered by the Board.
In the circumstances, the County Assembly was in breach of law.

80. Lack of an Audit Committee
During the year under review, the County Assembly did not put in place an audit
committee which would be responsible for preparation and presentation of an annual
report and to conduct an annual self-assessment to gauge its performance and
achievements against its mandate, roles, duties and responsibilities contrary to
Paragraph 7.2(a-c) of the Gazette Notice No.2690 on Audit Committee Guidelines for
County Governments which requires the Audit Committee to produce annual, special and
investigative reports and assess the performance and achievements of the County
Assembly against its mandate, roles, duties and responsibilities that should be captured
in the calendar of activities on an annual basis.
In the circumstances, the existence of an effectiveness of internal controls and
governance could not be confirmed.
81. Understaffing of Internal Audit Department
The internal audit section had one member of staff who was not able to carry out all the
internal audit functions. This was contrary to Section 155(1) to (5) of the Public Finance
Management Act, 2012 which provides that every County Government entity shall ensure
33
that it complies with this Act and has appropriate arrangements in place for conducting
internal audit according to the guidelines of the accounting standards board.
In the circumstances, the existence of an effective of internal controls and governance

82. Staff Payment Outside Integrated Payroll and Personnel Database (IPPD)
During the year under review, the County Assembly processed salaries of fourteen (14)
staff members outside the IPPD. It was not explained why Management paid these
employees outside the IPPD.
In the circumstances, the payment of the salaries and wages outside the Integrated
Payroll and Personnel Database (IPPD) system indicates ineffective internal controls on
payroll management.
34
COUNTY ASSEMBLY OF ISIOLO – NO.11

83. Doubtful Payment
statements reflects an amount of Kshs.50,745,500 in respect of other payments. Included
in this balance is an amount of Kshs.1,700,000 paid to two contractors for construction of
ward offices in the year 2014. However, the payment was not supported with a certificate
of work done. Further, this had not been reported as a pending bill in the previous financial
years and no explanation was provided why the bill has been outstanding for nine years.
In the circumstances, the accuracy, completeness and regularity of the payment of
84. Unsupported Training Expenses
statements reflect an amount of Kshs.179,655,649 in respect to use of goods and
services which includes a balance of Kshs.7,111,700 on training expenses out of which
an amount of Kshs.2,164,500 was paid to a consultancy firm for provision of training and
capacity development for MCAs and staff. However, no documentary evidence in terms
of training needs assessment to identify the skills gaps to be addressed, trainees’
attendance lists, training programme and certificates of completion were provided for
audit.
Further, supporting documents including payment vouchers to account for training

expenditure amounting to Kshs.991,360 were not provided for audit.
In the circumstances, the accuracy, completeness and accountability of Kshs.3,155,860

paid to a consultancy firm could not be ascertained.
Other Matter
In the previous audit report, several issues were raised under Report on Financial
Statements, Report on Lawfulness and Effectiveness in Use of Public Resources, and
Report on Effectiveness of Internal Control, Risk Management and Governance.
However, although Management has indicated that some of the issues have been
resolved, the matters remained unresolved as the Senate and County Assembly have not
deliberated on the same.
35
RESOURCES

86. Non-Compliance with Fiscal Responsibility on Wage Bill
statements reflects Kshs.231,870,396 in respect to compensation of employees. This
represents 39% of the total receipts of Kshs.593,536,657, which is contrary to Regulation
25(1)(b) of the Public Finance Management (County Governments) Regulations, 2015
which limits the County Government’s expenditure on wages and benefits to a maximum
of 35% of the total revenue for the year.
87. Staff Members above Approved Establishment
During the year under review, the County Assembly had eighty-two (82) Ward Office staff
members against a maximum of fifty-one (51) approved by the Commission on Revenue
Allocation resulting to an excess of thirty-one (31) Ward employees. The County
Assembly incurred an expenditure of Kshs.24,729,240 on salaries and other benefits for
the Ward office employees which was above the budget allocation by Kshs.589,257
arising from salaries and benefits to the excess staff. This contravened the Commission
on Revenue Allocation Circular No. CRA/CSO/CMG/9/VOL.V(43) of 03 August, 2020 to
County Assemblies on operationalization of Ward offices for members of County
Assembly which allowed each Ward to employ a maximum of three (3) staff members.
88. Failure to Construct Speaker’s Official Residence
statements reflects an amount of Kshs.179,655,649 in respect to use of goods and
services which includes Kshs.37,614,420 in respect to rental of produced assets.
However, review of records available indicated that the County Assembly did not incur
expenditure on construction of Speaker’s official residence during the year contrary to the
Salaries and Remuneration Commission circular of Ref. No. SRC/TS/CGOVT/3/61 dated
24 October, 2016 which provided guidelines on prioritization of funds for construction of
speaker’s official residence in the year 2018/2019 budget cycle and in any case not later
than 30 June, 2022.
Further, the County Assembly was required to provide a status report on the
implementation of the SRC guideline on construction of official residence of the Speaker
within an interval period of six (6) months for the Commission to assess compliance with
the guidelines and provide any interventions required. However, no evidence was
provided to confirm that such reports were prepared and submitted.
36
89. Irregular Subscriptions
During the year, the County Assembly paid an amount of Kshs.750,000 in respect to
subscriptions to the Society of Clerks at the Table (SOCATT). However, SOCATT is a
private organization that does not draw its mandate from the Constitution of Kenya or an
Act of Parliament.
90. Payment of Staff Salaries Outside the Payroll
statements reflects Kshs.231,870,396 in respect to compensation of employees.
However, the County Assembly paid salaries amounting to Kshs.13,251,300 to five (5)
officers/members of the County Assembly but the same was not processed through the
Integrated Personnel Payroll Database System (IPPD) contrary to Government policy.
Further, there was no evidence that the payments were subjected to statutory deductions
as required by Section 19(1)(f) of the employment Act, 2007 which states that an
employer may deduct from employees any amount of which is authorized by law. It was
not explained why the officers were not allocated payroll numbers.
91. Payment of Salaries Through County Assembly Operations Account
During the year under review, the County Assembly held an operations bank account
which received transfers from the County Assembly`s CBK recurrent account for
operations. However, it was observed that salary payments totalling Kshs.8,641,200 were
paid through the County Assembly’s operations account contrary to Regulation 99(2) of
the Public Finance Management (County Governments) Regulations, 2015 that require
the approved estimates of expenditure to form the basis of the accounts for the financial
year.

92. Delay in Completion of Assembly Chambers
statements reflects Kshs.32,554,477 in respect to acquisition of assets which includes
Kshs.5,440,500 incurred on construction of the County Assembly chamber during the
year under review. The construction of the Chamber commenced on 10 July, 2019, at a
contract price of Kshs.314,000,768 and contract period of ninety (90) weeks and was to
be completed on 31 March, 2021. However, the contract’s period was extended by an
additional sixty-four (64) weeks, up to 22 June, 2022 which, at the time of audit in
September, 2023, had lapsed but the project was not yet complete and the contractor
was not on the site.
In the circumstances, the public may not obtain value for money of the resources already
spent on construction of the County Assembly building.
37
93. Irregular Procurement of Legal Services
During the year under review the County Assembly paid Kshs.2,110,980 to a legal service
provider for a civil case. However, information available showed that Management engaged
the legal firm through direct procurement method without justification contrary to Section 104
of the Public Procurement and Asset Disposal Act, 2015. Further, no contractual documents
or records such as case files, court proceedings, court attendance, contract agreement, fee
note or invoice raised were provided for audit review.

AND GOVERNANCE
94. Lack of Training Committee
Review of records at the human resource management and development department,
there was no evidence that Management appointed a training committee to manage the
training function as required by the County Assembly Human Resources Policy Manual,
2019 No.7.2(1) which states that, ‘the management and co-ordination of training function
in the County Assembly will be the responsibility of the human resource management and
development department. The Clerk will appoint a training committee whose mandate will
be to manage the training function guided by the human resource management
development department.
In the circumstances, the effectiveness of human resource controls on training could not
be confirmed.
95. Lack of Functional and Effective Audit Committee
As previously reported, although the County Assembly has an audit committee in place,
the committee held only one meeting in the year under review contrary to Regulation
172(1) of the Public Finance Management (County Governments) Regulations, 2015
which requires the committee to meet once in every three months. Further, the committee
did not carry out an annual review of the independence, performance, and competency
of the internal audit unit contrary to Regulation 159(2) of the Public Finance Management
(County Governments) Regulations, 2015, requiring such a review by the committee and
make comments on the effectiveness of the internal audit unit in an annual report.
In the circumstances, the effectiveness of the audit committee in discharging its mandate
could not be ascertained.
96. Inadequate Internal Audit Arrangements and Facilitation
As previously reported, review of the County Assembly`s internal audit function revealed
that it was not adequately staffed and lacked requisite tools such as audit system and
analytical techniques to effectively deliver on its mandate. Management has not facilitated
and strengthened the internal audit function in compliance with Regulation 155(3) of the
38
Public Finance Management (County Governments) Regulation, 2015 which requires the
internal auditor to have unrestricted, direct, and prompt access to all records, officials or
personnel holding any contractual status and to all the premises and properties of the
entity.
Further, there was no evidence that internal audit work plan for the financial year under
review was approved by the audit committee and included in the County Assembly`s
budget in line with Regulation 163(2) of the Public Finance Management Regulations,
2015 which requires the annual work plan to be approved by the audit committee and
shared with the Accounting Officer for the inclusion in the budget.
In the circumstances, the effectiveness of the Internal Audit Unit to provide an

independent appraisal of the County Assembly’s operations, internal controls and risk
management could not be ascertained.
39
COUNTY ASSEMBLY OF MERU – NO.12

97. Irregular Payment for Undelivered Motor Vehicle
statements reflects an amount of Kshs.26,282,380 in respect to acquisition of assets
which includes Kshs.9,160,000 relating to purchase of vehicles and other transport
equipment. The County Assembly through the State Department of Public Works entered
into contract on 10 March, 2021 with a local supplier for the supply and delivery of motor
vehicle with a contract effective from 11 May, 2021 for a period of two years at
Kshs.9,160,000. However, as at the time of audit in November, 2023, the vehicle had not
been delivered to the County Assembly even after paying the full amount of
Kshs.9,160,000 according to the signed contract. No plausible explanation was provided
on why the County Assembly processed the payment and settled the full amount without
vehicle being delivered, inspected and confirmed to be the right vehicle according to the
specifications of the user department.
In addition, the proforma invoice dated 8 November, 2022 disclosed that the vehicle had
arrived at Mombasa Port and was being cleared. However, another letter from the
supplier dated 9 November, 2022 stated that a different model was at the Mombasa Port
which was according to the Government regulation required all vehicles to be Euro-4
compliant on emission. No corresponding communication showing whether the County
Assembly was in agreement or in rejection with the new development and how it affected
the initial procurement contract availed for audit
In the circumstances, the existence, ownership and value for money for the
Other Matter
98. Prior Year Matters

In the audit report of the previous year, several paragraphs were raised under the Report
on Financial Statements, Report on Lawfulness and Effectiveness in Use of Public
Governance. However, the Management has not resolved some of the issues raised in
the report.

RESOURCES

99. Non-Compliance with the Law on Ethnic Composition
Review of the staff establishment revealed that the County Assembly had a staff
establishment of eighty-eight (88) staff. However, analysis of the establishment revealed
40
that more than 1/3 of the staff belonged to the dominant ethnic community. This was
contrary to Section 7(2) of the National Cohesion and Integration Act, 2008 which
stipulate that no public establishment shall have more than one third of its staff from the
same ethnic community
In the Circumstances, Management was in breach of the law.
100. Employees Earning Below a 1/3 of their Basic Pay
Review of the monthly payrolls provided for audit revealed that the County Assembly had
ten (10) employees earning below a third of their basic salary contrary to Section 19(3) of
the Employment Act, 2007.
101. Irregular Payment of Subscription
statements reflects Kshs.631,506,825 in respect to use of goods and services which
includes Kshs.71,637,894 relating to other operating expenses which further includes
Kshs.3,200,000 paid to CAF. However, no legal backing was provided to show that the
expenditure was a proper charge to public funds.
Further, other operating expenses which further includes Kshs.1,500,000 paid as

subscriptions to SOCAT. However, no legal backing was provided to show that the
expenditure was a proper charge to public funds
102. Irregular Expenditure on Domestic Travel
The County Assembly incurred Kshs.9,590,800 on domestic travel and subsistence for
training of members of staff and budgetary committee meeting in Nairobi. This
contravened The National Treasury Circular number 20/2015 of 4 November, 2015 on
holding the events within County headquarters.
In the circumstances, the County Assembly was in breach of the law.
103. Delay in Completion of Contract for the Hansard System
The County Assembly contracted a company at a contract sum of Kshs.81,935,270 with

the works scheduled to be completed on 30 June, 2023. However, at the time of audit in
November, 2023, the works had not been completed although the contractor had
requested for an extension. The committee on implementation granted for the extension
to a further period of twenty-four (24) weeks up to 31 December, 2023. The works were
at 7% complete and behind schedule and the contractor was not in a position to complete
the works within the stipulated time even after extension of the project period.
41
Further, the invoice issued did not indicate the serial numbers of the supplied items which
made it difficult to confirm whether what was delivered is what was installed in the server
room as this could not be traced in the asset register.
In addition, it was observed that the two (2) servers in the server room had been left open
and accumulated dust even before the works were complete. The machines may not
work appropriately once the works are complete.
In the circumstances, propriety and value for money for the hansard system could not be
confirmed.

AND GOVERNANCE.
104. Incomplete Fixed Assets Register
Management did not prepare a fixed asset register in the format prescribed as it lacked
identification or serial numbers, acquisition date, description of asset, location, class, cost
of acquisition, accumulated depreciation, net book value and identification codes with
which assets were tagged.
In the circumstances, it was not possible to confirm existence of effective internal controls
to safeguard the County Assembly’s assets against misuse, theft or loss.
42
COUNTY ASSEMBLY OF THARAKA-NITHI – NO.13
105. Unsupported Expenditure – Use of Goods and Services
of Kshs.266,751,313 as disclosed in Note 3 to the financial statements. However, the
following observations were made:
105.1 Legal Services
The expenditure includes other operating expenses balance of Kshs.25,929,463 out of

which Kshs.1,900,000 was part-payment for a arbitration fee whose invoice amount was
Kshs.10,888,000. However, evidence of approval to procure these services and
supporting documents for the invoiced amount were not provided for audit review.
105.2 Insurance Costs
Further, the expenditure includes insurance cost amounting to Kshs.20,123,000 out of

which an amount of Kshs.17,197,137 was incurred on staff medical cover. However, the
bid documents of both successful and unsuccessful bidders, payment vouchers and
progress report were not provided for audit. In addition, the insurance cost includes
expenditure of Kshs.2,800,000 incurred on plant, equipment and machinery insurance
service which was not supported by valuation report and insurance policy documents.
Further, the signed professional opinion to the Accounting Officer on the procurement
proceedings did not conform to the format of the ninth schedule and Regulation 78(4) of
the Public Procurement and Asset Disposal Regulations, 2020.
In the circumstances, the accuracy, completeness and regularity of the expenditure

amounting to Kshs.22,023,000 could not be confirmed.
Emphasis of Matter
106. Pending Bills
Other important disclosures under Note 1 and 2 reflects pending accounts payable and
pending staff payables balance of Kshs.117,069,290 and Kshs.13,267,099 respectively.
However, the pending bills were not paid as first charge from funds of the subsequent
year contrary to Regulation 41(2) of the Public Finance Management (County
Governments) Regulations, 2015.
Further, the pending accounts payable balance includes Kshs.14,925,000 on annual

subscriptions to County Assemblies Forum and Kshs.772,000 for Society of Clerks at The
Table in Kenya (SOCCAT) which are not backed by any law.
43
In addition, pending bills includes Kshs.33,028,245 being amounts owed for legal services
which were incurred without the approval from the Attorney General. This was contrary
to Circular Ref No.AG/CONF/6/E/247 VOL.II, which prohibited Government entities from
engaging the services of a consultant to render any legal services relating to functions of
the Attorney General without approval of the Attorney General.
Other Matter
In the audit report of the previous year, several issues were raised under Report on
Resources and Report on Effectiveness of Internal Controls, Risk Management and
Governance. However, the Management had not resolved the issues or given any
explanation for failure to implement the recommendations.

RESOURCES
108. Irregularities in Engagement of Casual Employees
Review of casual payment details revealed that thirteen (13) casual employees were
engaged for more than three (3) months continuously and paid Kshs.4,328,126. This was
contrary to Section 37(b) of the Employment Act, 2007 which states that, where a casual
employee performs work which cannot reasonably be expected to be completed within a
period, or a number of working days amounting to the equivalent of three months or more,
the contract of service of the casual employee shall be deemed to be one where wages
are paid monthly and Section 35(1)(c) shall apply to that contract of service.
Further, recruitment documents including advertisements, list of applicants and the

minutes of the interviews were not provided for audit.
109. Delayed Completion of Speaker’s Residence
On 29 April, 2021, the Management awarded the contract for construction of speaker’s
residence at a sum of Kshs.33,709,617 which was signed on 20 May, 2021. However, as
reported in the previous financial years, the project is still incomplete. During the year
under review, the County Assembly received Exchequer for development projects of
Kshs.19,070,112 against an approved budget of Kshs.20,000,000 but only
Kshs.12,511,692 was paid towards the project.
44
Further, the Salaries and Renumeration Commission through Circular
No.SRC/TS/CGOVT/3/61/VOL.V(44) stipulated the deadline for leasing County
Assembly speaker’s house to be 30 June, 2022, however, as at 30 June, 2023, one year
later, the project was incomplete.
In addition, the cost baseline reports that would document and detail the money paid and
balances owed to the contractor vis a vis the actual works completed was not prepared
by the Implementation Committee.
In the circumstances, delay in works may result in cost escalation and value for money
on expenditure incurred in the construction of the speaker’s residence could not be
confirmed.
110. Irregular Procurement of Motor Vehicle
During the year under review, Management paid advance payment of Kshs.5,000,000 for
purchase of a new motor vehicle. However, this payment exceeded 20% of the quoted
sum of Kshs.12,700,000. This was contrary to Section 147(1) of the Public Procurement
and Asset Disposal Act, 2015 which states that advance payments should not exceed
20% of the original quoted price. The vehicle had not been delivered at the time of this
audit in July, 2023 and the validity period of the Local Purchase Order issued on 06
September, 2022 had expired.
Further, invoices, Electronic Tax Register (ETRs) and acknowledgments for the
transferred amount of Kshs.5,000,000, detailed schedule of requirements, specifications
and a copy of the authority for publication was not provided for audit review as required
in Regulation 173(1) of the Public Procurement and Asset Disposal Regulations, 2020.
In addition, there was no evidence that the procurement was publicized on the county
websites, public notice boards or the public regulatory authority platforms. This was
contrary to Executive Order No.2 of 2018 on procurement which states that all public
procurement entities shall maintain and continuously update and publicize complete
information of all the tenders awarded.
111. Employees Earning Below a Third of Their Basic Salary
Analysis of the staff payrolls revealed that four (4) employees were paid net salaries that
was less than a third of their basic salary. This was contrary to Section 19(3) of the
Employment Act, 2007 which states that without prejudice to any right of recovery of any
debt due, and notwithstanding the provisions of any other written law, the total amount of
all deductions which under the provisions of Sub-Section (1), may be made by an
employer from the wages of his employee at any one time shall not exceed two-thirds of
such wages.
45
AND GOVERNANCE
112. Fixed Assets Register
Annex 4 to the financial statements reflects summary of fixed assets balance of

Kshs.82,145,804 while the fixed assets register reflects Kshs.13,777,390 resulting to an
unreconciled variance of Kshs.68,368,414.
In addition, buildings inherited from the defunct local authority had not been revalued and
the fixed assets register omits the dates of purchase for some of the assets, their
respective costs and status. Further, some of the assets have not been tagged for ease
of tracking and verification.
In the circumstances, the existence of valuation to ensure of the fixed assets could not
be ascertained.
113. Failure to Establish an Audit Committee
As reported in previous years, Management has not established an Audit Committee as

required by Regulation 167(1) of Public Finance Management which states that subject
to paragraph (2) of this regulation, each county government entity shall establish an audit
committee.
In the circumstances, the existence of an effective mechanism of oversight on internal

controls, risk management and overall governance could not be confirmed.
114. Failure to Prepare Quarterly Cash Flow Projections
As reported in the previous year, there was no evidence to indicate that Management
prepared quarterly cash flows projections that were supported by approved procurement
plan as required by Regulation 43(3), (4) of the Public Finance Management (County
Governments) Regulations, 2015. Further, the County Treasury did not publish and
publicize quarterly liquidity position reports reflecting the impact of revenue collection
efforts, spending and County public debt operations on the cash position of the County
Assembly as required by Regulation 45(6) of the Public Finance Management (County
In the circumstances, the existence of an effective tool to help management to control the
resources could not be confirmed.
46
COUNTY ASSEMBLY OF EMBU – NO.14

115. Unaccounted for Other Receipts
The statement of receipts and payments reflects nil balance on other receipts. However,
an amount of Kshs.38,000 was recovered from two (2) former external County Assembly
Service Board members and two (2) former Members of County Assembly (MCAs) for
unreturned tablets at the expiry of their term of office. Further, Management indicated the
balance on unreturned tablets from other fifteen (15) MCAs amounting to Kshs.187,500
was recovered from the members’ allowances at the rate of Kshs.12,500 but supporting
schedules and documents to support the recovery and accountability were not provided
for audit. In addition, a balance of Kshs.12,000 from one (1) MCA who deposited an
amount of Kshs.500 instead of Kshs.12,500 was also not recognized as other income in
the financial statements.
In the circumstances, the accuracy and completeness of other receipts Nil balance could
not be confirmed.
116. Unsupported Domestic Travel Expenditure
Kshs.373,437,011 and as disclosed in Note 3 to the financial statements. The amount
includes domestic travel and subsistence amount of Kshs.119,816,421 out of which is an
amount of Kshs.3,801,000 was not supported with evidence of travel documents such as
work tickets, bus tickets and daily sitting reports or minutes.
In the circumstances, the completeness and value for money on the expenditure
Emphasis of Matter
117. Pending Bills
As disclosed in Note 1 and 2 on other disclosures, the County Assembly had pending
accounts payable balance of Kshs.75,044,428 as at 30 June, 2023. However,
Management did not explain why the bills were not settled during the year when they
occurred. Failure to settle bills during the year in which they relate to distorts the financial
47
Other Matter

the Financial Statements, Report on Lawfulness and Effectiveness in Use of Public
Governance. However, the Management had not resolved the issues nor given any
explanation for the failure to implement the recommendations.

RESOURCES
119. Late Remittance of Provident Fund and Pension Scheme Deductions
statements reflects social security benefits amount of Kshs.36,617,347 which includes
Local Authority Provident Fund and Local Authority Pension Trust Fund deductions
amounting to Kshs.25,566,485 which were remitted late. This was contrary to Section
53A(1) of the Retirement Benefits Act, 1997 (Revised 2017) which states that where an
employer, having with the agreement of an employee who is a member of a scheme,
made a deduction from the employee’s emoluments for remittance to the scheme, fails to
remit the deduction within fifteen days of the deduction, the scheme may, after giving
such employer not less than seven days’ notice, institute proceedings for the recovery of
the deduction.
120. Non-Compliance with Law on Ethnic Composition
During the year under review, forty-five (45) or 47% out of ninety-six (96) of the County
Assembly employees belonged to the dominant ethnic community in the County. This
was contrary to Section 7(1) and (2) of National Cohesion and Integration Act, 2008 which
states that all public offices shall seek to represent the diversity of people of Kenya in
employment of staff and that no public establishment shall have more than one third of
its staff from the same ethnic community.
121. Irregular Use of Low Value Procurement
statements reflects cash and cash equivalents balance of Kshs.21,732,393. However,
seven (7) and four (4) temporary imprests amounting to Kshs.348,000 and Kshs.154,800,
respectively were taken to pay for bill boards advertisements and website repair which
resulted to splitting of contracts to avoid the use of procurement procedure. This was
contrary to Regulation 43(1) of Public Procurement and Asset Disposal Regulations,
48
2020 which states that a Procuring Entity shall not split or structure its contracts for the
purpose of avoiding the use of a procurement procedure as provided for under Section
54(1) of the Act and Second Schedule on the Threshold Matrix of the Public Procurement
and Asset Disposal Regulations, 2020 which states that the maximum low value item
level of expenditure per item per financial year allowed for goods, works and services is
Kshs.50,000, Kshs.100,000 and Kshs.50,000 respectively.
Further Electronic Tax Receipts (ETR) were not obtained as required by Regulation 93(2)
of Public Procurement and Asset Disposal Regulations, 2020 which states that any
procurement under paragraph (1) shall be supported by the original Kenya Revenue
Authority Electronic Tax Receipt (KRA ETR Receipt) duly signed by the person
undertaking the low value procurement of goods, works or services.
statements reflects other grants and transfers amount of Kshs.71,757,560 which includes
membership fees, dues and subscriptions to organizations amount of Kshs.12,105,560
out of which an amount of Kshs.10,194,000 was irregularly paid to County Assembly
Forum and Society of Clerks at the Table. However, there was no legislative framework
to support the payments. However, the two (2) bodies are private organization that does
not draw its mandate from the Constitution of Kenya or an Act of Parliament.
123. Unvalued Ward Offices and Lapsed Lease Agreements
statements reflects use of goods and services amount of Kshs.373,437,011 which
includes rentals of produced assets of Kshs.29,048,399 out of which an amount of
Kshs.2,817,154 was incurred on payment of rent for leased ward offices. Although
Management has shown efforts of undertaking valuation processes, the County Assembly
has not completed the new valuation for the ward offices and has continued paying
rent based on old rates. It was therefore not possible to ascertain whether the rates at
which the premises were paid for is the current prevailing market rates. Further, the lease
agreements were not provided for audit. This was contrary to Regulation 139(3) of Public
Procurement and Asset Disposal Regulations, 2020 which states that payments shall only
be made after an invoice or fee note is accurately raised and submitted in accordance
with the provisions of the contract.
In the circumstance, Management was in breach of the law.
124. Delay in Completion of Office Complex Project
statements reflects acquisition of assets amount of Kshs.47,728,000 which includes
construction of buildings amount of Kshs.34,312,078 out of which an amount of
49
Kshs.29,416,020 was for construction of the County Assembly Office Complex. Review
of contract documents revealed that the project entailed construction of a seven (7) storey
office complex. The contractor was awarded the contract on 4 July, 2019 at a contract
sum of Kshs.349,707,101 with commencement date of 17 June, 2019 for a period of one
hundred and four (104) weeks. An extension of the contract was later given for fifty-six
(56) weeks after lapse of first contract but as at 30 June, 2023, the project had
cumulatively incurred an amount of Kshs.144,600,757 representing 41.3% of the contract
sum and the project completion was at 52% with nine (9) months remaining to the expiry
of the extended completion period.
Review of the project status revealed delay in implementation of this project. This was
contrary to Regulation 137(c) of Public Procurement and Asset Disposal Regulations,
2020 which states that in managing complex and specialized procurement contracts
under Section 151 of the Act, contract implementation shall be as per the project
implementation plan agreed upon by the contractor and the procuring entity. No
satisfactory explanation was provided for the delay in implementation of this project since
substantial funding had been allocated.
125. Delay in Construction of Speaker’s Residence
Review of IFMIS development expenditure vote book status report reflects that the
County Assembly allocated an amount of Kshs.10,000,000 in the original budget towards
the purchase of land for construction of Speaker’s residence which was later revised to
Nil balance in the supplementary budget. The same project had been allocated an amount
of Kshs.8,000,000 in the 2021/2022 financial year which was not utilized. Management
provided a letter requesting the County Executive Committee Member for Lands, Physical
Planning, Housing and Urban Development for suitable land but there was no evidence
of further communication or follow up.
Further, the County Assembly continued to pay rent for the Speakers residence contrary
to Salaries and Remuneration Commission (SRC) Circular requiring the Counties to
hasten the construction of the official residences by allocating funds and prioritizing the
construction and SRC Circular Ref No. SRC/ADM/11 dated 27 June, 2022 which advised
that the option for County Governments paying rent or leasing official residential house
for Governors, Deputy Governors and County Assembly Speaker shall cease on 30 June,
2022. The County Assembly paid an amount of Kshs.900,000 in 2022/2023 financial year
being part payment of a residential accommodation for the Speaker out of the annual rent
amounting to Kshs.981,660.
126. Lack of an Assets Disposal Plan
During the year under review, the County Assembly did not have an approved disposal
plan of items declared as unserviceable, surplus, idle or obsolete contrary to Regulation
176(1) of Public Procurement and Asset Disposal Regulations, 2020 which states that an
Accounting Officer of a procuring entity shall ensure that an annual assets disposal plan
50
for items declared as unserviceable, surplus or obsolete, obsolescence stores, asset or
equipment as set out under Section 53(4) of the Act.
Further, physical inspection carried out in the month of August, 2023 revealed that the
County Assembly still held sixteen (16) tablets returned by the former MCAs in
September, 2022 which are not being utilized and continue to deteriorate.
127. Failure to Provide Annual Operations Report for the County Assembly
Service Board
Management of the County Assembly did not provide County Assembly Service Board
annual operations report for 2022/2023 financial year contrary to Section 36(1) of the
County Assembly Services Act, 2017 which states that within three months after the end
of each calendar year, the Board shall prepare and lay before the County Assembly, a
report of its operations during that year.
In the circumstances, it was not possible to confirm whether County Assembly Service
Board delivered on the mandated functions.
128. Avoidable Expenditure on Penalties and Interests on Late Remittance of

Statutory Deductions
statements reflects compensation of employees amount of Kshs.252,112,264 which
includes Pay As You Earn Tax amount of Kshs.20,558,271 remitted late in 2022/2023
financial year. However, the Kenya Revenue Authority imposed penalties and interest
amounting to Kshs.1,027,914 and Kshs.205,583, respectively, for late payments which
could have been avoided had the deductions been remitted on time. The late remittance
contravenes Section 72D of Income Tax Act, 2012.
In the circumstances, the regularity and value for money for penalties and interest
129. Irregular Expenditure on Temporary Imprest
Review of surrender payment vouchers revealed irregular imprest expenditure of

Kshs.1,279,676 incurred on purchase of meals and refreshments for officers who had
already been paid per diem contrary to Regulation 93(3) of Public Finance Management
(County Governments) Regulations, 2015 which states that temporary imprests shall be
issued mainly in respect of official journeys and are intended to provide officers with funds
with which they can meet travelling, accommodation and incidental expenses.
51
AND GOVERNANCE
During the year under review, Management had not developed a Risk Management
Policy or documented strategies for identifying risks that may have potential effects on
the operations of the County Assembly contrary to Regulation 158(1) of the Public
Finance Management (County Governments) Regulations, 2015 which states that the
role of Accounting Officer in risk management is to ensure that the County Government
entity develops risk management strategies, which include fraud prevention mechanism
and the County Government entity develops a system of risk management and internal
control that builds robust business operations.
In the circumstances, identification of risks affecting the operations and existence of a risk
register of the County Assembly could not be confirmed.
131. Summary of Non-Current Asset Register
The summary of non-current assets register reflects a balance of Kshs.237,726,406 as

disclosed in Annex 3 to the financial statements which excludes value of land. Further,
Management did not value the land and did not provide land ownership documents for
audit. In addition, the assets handing over report from the defunct County Council of
Embu was also not provided for audit.
Further, the summary of non-current assets register as disclosed in Annex 3 to the

financial statements reflects a balance of Kshs.237,726,406 while the fixed assets
register reflects total assets balance of Kshs.243,404,678 resulting to an unexplained and
unreconciled difference of Kshs.5,678,272. Further, the fixed assets register provided
does not indicate totals of each asset class.
In the circumstances, the effectiveness of mechanism to safeguard assets could not be

confirmed.
52
COUNTY ASSEMBLY OF KITUI – NO.15
132. Unconfirmed Foreign Travel and Subsistence Allowances
statements reflects expenditure totalling Kshs.472,793,697 under use of goods and
services. However, review of the expenditure revealed that included in the amount is
Kshs.90,664,200 relating to foreign travel and subsistence. Review of the payment
records revealed that an amount of Kshs.19,883,534.00 was incurred on payments of air
ticketing, accommodation, conferences and training for courses offered mainly in Middle
East and Asiatic Countries. However, no justification was provided in support of why the
programs were undertaken abroad and not locally.
In the circumstances, the propriety of the expenditure could not be confirmed

Emphasis of Matter
The statement of comparison of budget and actual amounts; recurrent and development
reflects final receipts budget and actual on comparable basis amount of
Kshs.1,529,877,619 and Kshs.1,029,936,698 respectively resulting to an under-funding
of Kshs.499,940,921 or 33% of the approved budget. Similarly, the County Assembly
expended Kshs.1,029,694,736 against an approved budget of Kshs.1,529,877,619
resulting to an under-expenditure of Kshs.500,182,883 or 33% of the budget.
The under-funding and under-expenditure affected the planned activities and may have
134. Pending Bills
Annex 1 to the financial statements, analysis of pending accounts payable reflects

pending bills amounting to Kshs.11,691,804 that were unsettled as of 30 June, 2023.
However, no explanation was given for failure to settle the bills. Failure to settle bills in
the year to which they relate adversely affects the implementation of the subsequent
year’s budgeted programs as the pending bills form the first charge.
My opinion is unmodified in respect of these matters.
Other Matter
135. Prior year Matters
53
Standards Board template.

RESOURCES
136. Irregular Payment to the County Assembly Forums
statements reflects expenditure totalling Kshs.472,793,697 under use of goods and
services. However, review of the expenditure revealed that included in the amount is
Kshs.34,837,763 relating to other operating expenses. The amount is further made up of
Kshs.2,700,000 in respect to subscriptions paid to County Assemblies Forum and Society
of Clerks. However, it was noted that these entities are not established in law and
therefore the payment amounting to Kshs.2,700,000 was irregular.
Review of human resource records revealed that one hundred and thirty-one (131)
employees representing 96% of the total employees of one hundred and thirty-six (136)
employees were from one dominant ethnic community in the County. This is in
contravention of Section 7(2) of the National Cohesion and Integration Act 2008 which
requires that no public establishment shall have more than one third (1/3) of its employees
from the same ethnic community.
138. Delays in the Construction of Speaker's Residence
As reported previously, Kitui County Assembly invited tenders vide tender

No. CAKITUI/1/02/2020/2021 for the purchase of land for the construction of the
speaker’s official residence within Kitui town. The tender was by way of restricted tender
posted on its website and supplier portal. Through the statement of professional opinion
dated 29 March, 2021, the Accounting Officer approved the process to proceed to the
next stage. However, the minutes of the tender evaluation committee for purchase of the
land for the construction of the Speakers official residence held on 30 April, 2021
(negotiation process) recommended that the tender be re-advertised. The re-
advertisement had not been actualized as at the date of completing the audit.
In the circumstances, the delayed construction of the Speaker’s residence may hinder
effective delivery of service by the Speaker.
54
139. Lack of a Risk Management Policy
Review of internal controls revealed that the County Assembly does not have a risk
management policy and there was also no evidence to show that formal risk assessment
was undertaken. This is in contravention of the provisions of Regulation 158 (1)(a) of the
Public Finance Management (County Governments) Regulations, 2015 which requires
the Accounting Officer to develop risk management strategies which include fraud
prevention mechanism and develop a system of risk management and internal controls
that build robust business operations.
In the circumstances, the County Assembly is exposed to losses and interruption of

operations in the event a disaster occurs.
140. Lack of a Disaster Recovery and Business Continuity Plan
During the year under review, the County Assembly operated without a disaster recovery
and business continuity plan contrary to the provisions of Section 99 of the Public Finance
Management Act, 2012. The Act stipulates that the role of a Disaster Recovery Plan is to
secure the County Government’s ability to meet its obligations to provide basic services
or its financial commitments, identify the financial problems and be designed to place the
county government in a sound and sustainable financial condition as quickly as possible
in case of disaster.
In the circumstances, the County Assembly is exposed to loss of critical information in

case of disaster.
141. Use of Manual Payroll
As previously reported, the County Assembly of Kitui operates two parallel payrolls,
manual payroll and Integrated Payroll and Personnel Database (IPPD). It was not clear
why spreadsheet payroll was operated parallel to IPPD instead of having all the staff
managed in the recommended database platform. Further, use of spreadsheet as the
basis for maintaining payroll is not sanctioned by law and is prone to changes and
manipulation with no audit trail.
In the circumstances, the County Assembly payroll management is prone to errors.
142. Value of Assets
Annex 4 to the financial statements on summary of non-current asset register shows that
the County Assembly had assets cumulatively valued at Kshs.642,248,435. The assets
include those acquired and those inherited from the defunct Local Governments and Kitui
County Government. However, the handing over and ownership documents were not
provided for audit verification. Further, the asset register includes land and buildings
55
valued at Kshs.534,910,705 whose ownership documents were also not provided.
Further, Management did not provide a breakdown of the valuation amounts and the basis
for their inclusion.
In the circumstances, the existence of an effective mechanism in safeguard the County

assets could not be confirmed.
56
COUNTY ASSEMBLY OF MACHAKOS – NO.16

143. Variances Between Financial Statements and Integrated Financial

Management Information System (IFMIS)
Review of statements of receipts and expenditure indicates the following balances differs
with the IFMIS payments records as tabulated below;
Statement IFMIS
Balance Balances Variances
Expenditure Components Kshs. Kshs. Kshs.
Use of Goods and Services 397,666,774 357,744,649 39,922,125
Grants and Transfers 86,244,000 102,391,600 (16,147,600)
Social Security Benefits 29,378,130 29,417,321 (39,191)
Acquisition of Assets 27,039,660 30,716,406 (3,676,746)
No reconciliation as examination was provided.
In the circumstances, the accuracy and completeness of the above expenditure could not
be confirmed.
144. Irregularities in Payments of Ward Rent and Office Expenses

statements reflects an amount of Kshs.397,666,774 in respect of use of goods and
services which includes an amount of Kshs.15,157,500 relating to ward rent and office
expenses. Review of the payment records revealed that an amount of Kshs.93,000 was
incurred on payments of ward rent for five (5) ward offices. However, it was observed that
the lease agreements between the County Assembly and the landlords had expired
approximately three (3) months before the end of the financial year and had not been
renewed.
In the circumstances, the accuracy and completeness of the ward rent of

Emphasis of Matter
The statement of comparison of budget and actual amounts recurrent and development
combined reflects final receipts budget and actual on comparable basis of
Kshs.1,508,346,181 and Kshs.1,132,140,390 respectively resulting to an under-funding
of Kshs.376,205,791 or 25% of the approved budget. Similarly, the County Assembly
expended Kshs.1,132,055,865 against an approved budget of Kshs.1,508,346,181
resulting to an under-expenditure of Kshs.376,290,316 or 25% of the budget.
57
The underfunding and underperformance affected the planned activities and may have
impacted negatively on service delivery to the residents of Machakos.
146. Pending Bills

pending account payable. However, pending bills balance of Kshs.66,532,791 have been
outstanding for more than one (1) year with some dating back to August, 2018.
Management has not explained the reasons for failure to settle the long outstanding
amounts as they ought to form the first charge in the subsequent period. Failure to settle
bills in the year to which they relate adversely affects the implementation of the
subsequent year budgeted programs as the pending bills form the first charge to the
subsequent year budget. The County Assembly is also at risk of incurring penalties and
interest with the continued delays in settlement of the bills.
Other Matter
147. Unresolved Prior year Matters
on Financial Statements and Report on Lawfulness and Effectiveness in Use of Public
Resources. However, Management had not resolved the issues or given any explanation
for the failure to implement the recommendations

RESOURCES
During the year under review, the total number of employees of the County Assembly
was one hundred and thirty-four (134) employees out of which one hundred and twenty-
two (122) or 91% were from the dominant ethnic community in the County. This was
contrary to Section 7(2) of the National Cohesion and Integration Act, 2008 which requires
that no public establishment shall have more than one third (1/3) of its employees from
the same community.
149. Irregular Payment to the County Assembly Forums and SOCATT
Kshs.397,666,774 and as disclosed in Note 5 to the financial statements. The amount
includes an expenditure of Kshs.12,180,441 incurred on other operating expenses out of
which a balance of Kshs.5,200,000 was paid to Society of Clerks at the Table (SOCATT)
58
and the County Assemblies Forum as annual subscription fees. However, the two (2)
entities are not intergovernmental relation in legal capacity and the payments were not
budgeted for under the National Government’s estimates.
150. Delay in Construction of New Chambers
The County Assembly entered into a contract for the construction, equipping and
furnishing of Modern Chamber and associated works at a contract sum of
Kshs.349,312,987. The project commenced on 9 June, 2020 and was set to be completed
on 6 June, 2022. According to the latest progress report dated May, 2023, the overall
progress of work amounted to Kshs.121,419,123 representing 35%, while the payments
amounted to Kshs.116,045,041 or 33%. The completion date was extended to 19
December, 2022 which has since lapsed, and no further extensions have been approved
to date but the project was incomplete at the time of audit in December, 2023.
In the circumstances, value for money on the payments amounting to Kshs.116,045,041

on construction of the Chambers could not be confirmed.
151. Delay in Completion of Ward Offices
The statements of receipts and payments and as disclosed in Note 10 to the financial
statements reflects an amount of Kshs.27,039,660 incurred on acquisition of assets.
Included in the amount is an expenditure of Kshs.21,735,865 on construction of buildings.
Examination of the projects undertaken by the County Assembly during the year under
review revealed that construction of ward offices in Matungulu East, Kangundo North,
Kivaa and Ndalani was ongoing and Construction of ward office at Muthwani had stalled
due to land disputes while Construction of four (4) (Machakos Central, Muvuti, Mbiuni and
Wamunyu) ward offices was yet to be commenced as land had not been identified.
In the circumstances, value for money on Kshs.21,735,865 spent on construction of the

buildings could not be confirmed.

As previously reported, the County Assembly operates two parallel payrolls, a manual
payroll and Integrated Payroll and Personnel Database (IPPD). It was not clear why
spreadsheet payroll was operated parallel to IPPD instead of having all the staff managed
in the recommended database platform. Spreadsheet is prone to changes and
manipulation with no audit trail.
In the circumstances, the integrity of payroll data could not be confirmed.
59
153. Non-Functional Audit Committee
During the year under review, the audit committee was not fully constituted contrary to
Regulations 167(4) of the Public Finance Management (County Governments), 2015
which requires the Accounting Officer to ensure that each County Government entity has
an audit committee in place and whose membership shall be a minimum of three,
excluding a person who shall be appointed to represent the County Treasury in each audit
committee and a maximum of five.
In the circumstances, the absence of a functional audit committee may lead to ineffective
internal controls.
154. Unconfirmed Value of Assets

summary of non-current asset register. The assets include those acquired and others
inherited from the defunct Local Governments and the Machakos County Government.
However, the handing over and ownership documents for the assets were not provided
for audit review. In addition, the assets register also includes land, buildings and
structures valued at Kshs.624,590,486 whose ownership documents and breakdown of
valuation amounts were not provided for audit review.
In the circumstances, the existence of an effective mechanism to safeguard the assets

60
COUNTY ASSEMBLY OF MAKUENI – NO.17
155. Inaccuracies in the Financial Statements
The financial statements reflect balances that were at variance with the Integrated
Financial Management Information System (IFMIS) balances as summarized below:
Financial
Statements IFMIS Trial
Balance Balance Variance
Item (Kshs.) (Kshs.) (Kshs.)
Cash and Cash Equivalents 11,630,893 (545,789,398) 557,420,291
Accounts Receivable - (28,338,255) 28,338,255
Accounts Payables 9,477,191 64,231,163.60 54,753,972.60
Fund Balance b/fwd 313,175 (640,199,345) 640,512,520
In the circumstances, the accuracy and completeness of the respective financial

statements balances could not be confirmed.
156. Misclassification of Expenditure on Acquisition of Assets
The statement of receipts and payments reflects acquisition of assets balance of

Kshs.35,660,804 and as disclosed in Note 10 to the financial statements. Included in the
amount is expenditure on construction and civil works amounting to Kshs.18,880,044.
Review of the supporting documents revealed that the amount includes expenditure on
consultancy services of Kshs.1,955,760 for the development of the County Assembly
Strategic Plan 2020-2025, that was charged to acquisition of assets instead of use of
goods and services.
In the circumstances, the acquisition of assets amount of Kshs.35,660,804 for the year
ended 30 June, 2023 is overstated by Kshs.1,955,760 while the use of goods an ser vices
is understated by a similar margin.
157. Inaccuracies in Finance Costs
The statement of receipts and payments reflects finance costs of Kshs.1,884,331, as

disclosed in Note 11 to the financial statements. Review of supporting documents
revealed that the bank charges included penalty charges by the bank for late settlement
of overdrafts of Kshs.1,064,628. However, penalty charges for late settlement of
overdrafts during the period amounted to Kshs.2,124,827. The balance is therefore
understated by Kshs.1,060,199.
In the circumstances, the accuracy and completeness of the reported finance costs of
Kshs.1,884,331 for the year ended 30 June, 2023 could not be confirmed.
61
158. Double Compensation on Transportation Expenses to Members of County
Assembly (MCAs)
As previously reported, the statement of receipts and payments reflects compensation of

employees` expenditure amounting to Kshs.342,548,100. This amount includes
Kshs.142,219,385 under personal allowances paid as part of salary that further includes
Kshs.21,111,448 and Kshs.2,124,601 for transport allowance and mileage allowance
respectively, for Members of the County Assembly (MCAs). However, the review of the
vehicle records revealed that three (3) MCAs had also been allocated personal vehicles
fully maintained and fuelled by the County Assembly which amount to double
compensation on transport expenses.
In the circumstances, the completeness and propriety of the compensation of employees`

expenditure amounting to Kshs.142,219,385 could not be confirmed.
159. Irregular Oversight and Public Participation Expenses
The statement of receipts and payments reflects use of goods and services balance
of Kshs.381,390,355 as disclosed in Note 5 to the financial statements. Included in the
amount is other operating expenses of Kshs.134,352,072 which further includes
Kshs.20,604,600 and Kshs.33,635,250 both totalling Kshs.54,239,850 incurred on
oversight and public participation activities respectively.
The amount relates to payments made to elected MCAs at a rate of Kshs.50,000 and
Kshs.70,000 each for facilitation during public participation and oversight activity
respectively. The rates applied are however not approved in the Salaries and
Remuneration Commission (SRC) Gazette notice on remuneration and benefits for state
officers in the County Assembly dated 9 August, 2022, covering financial years 2021/2022
to 2024/2025. Further, each participating MCA was paid transport facilitation of
Kshs.6,000 per day regardless of the distance covered.
In the circumstances, the propriety of the payments amounting to Kshs.54,239,850 could
not be confirmed.
160. Irregular Ward Lease Agreements
As previously reported, the statement of receipts and payments reflects use of goods and
services expenditure totalling Kshs.381,390,355 as disclosed in Note 5 to the financial
statements. The amount includes rentals of produced assets of Kshs.3,671,500.
However, review of the rental leasehold agreements revealed that the Ward lease
agreements were entered into between the Ward representatives (lessees) and the
landlord (lessors) instead of between the County Assembly of Makueni and the Landlords.
Further, the lease agreement documents prepared were not signed or endorsed by an
Advocate of the High Court or County Assembly head of legal services to validate the
agreement. In addition, the agreements were not adequately supported with copies of title
deeds for the landlords to show ownership of the land, registration of the land to be leased
and the ownership of the building that was being leased, or part thereof.
62
In the circumstances, the propriety of rental of produced assets expenditure of
Emphasis of Matter
161. Pending Bills
Note 1 to the financial statements on Other Important Disclosures reflects pending

accounts payable of Kshs.6,274,494 as at 30 June, 2023. Management has not explained
why the bills were not settled during the year they occurred.
Failure to settle bills during the year to which they relate adversely affects the budgetary
provisions of the subsequent year to which they are charged as they form a first charge.
Other Matter
Governance. Management had however, not resolved the issues or given any explanation
for failure to implement the recommendations as at 30 June, 2023.

RESOURCES
163. Non-Compliance with Law on Development Expenditure Threshold
The statement of comparison of budget and actual amounts reflects total actual
expenditure of Kshs.933,261,445 comprising of recurrent and development expenditure
of Kshs.914,381,401 and Kshs.18,880,044 respectively. The development expenditure
accounted for only 2% of the total expenditure which is below the 30% threshold stipulated
by Regulation 25(1)(g) of the Public Finance Management (County Governments)
Regulations, 2015.
164. Non-Compliance with Law on Imprests
Note 5 to the financial statements reflects domestic travel and subsistence allowances of
Kshs.72,896,888. The amount includes per diem allowances totalling Kshs.18,678,325
paid to Members of the County Assembly and other members of staff for travels outside
the County to transact County Assembly business that would ordinarily be carried out in
the offices, contrary to Regulation 93(4)(a) of the Public Finance Management (County
63
Governments) Regulations, 2015 which provides that before issuing temporary imprest
the Accounting Officer shall ensure that the main objective of the journey cannot be
achieved by other cheaper means.
165. Failure to Comply with the Ceiling for Ward Operation Costs
Note 5 to the financial statements reflects other operating expenses amount of

Kshs.134,352,072. The operating expenses includes Kshs.52,925,580 in respect to ward
operation cost for forty-eight (48) ward offices excluding rent. However, the expenditure,
however, exceeds the ceiling of Kshs.15,728,832 stipulated in the Commission of
Revenue Allocation (CRA) Circular no. CRA/CSO/CMG/9/VOL.V(43) dated 3 August,
2020 on Advisory of Ward Offices Operation Costs.

166. Irregular Subscription to Devolution Forums
Kshs.381,390,355 as disclosed in Note 5 to the financial statements. Included in the
amount is other operating expenses of Kshs.134,352,072. The operating expenses
includes Kshs.2,500,000 and Kshs.750,000 paid to the County Assembly Forum (CAF)
and Society of Clerks at the Table (SOCATT) respectively. However, there was no legal
basis for the establishment of CAF and SOCATT.
167. Non-Compliance with Human Resource Regulations and Policies
167.1 Failure to Meet Recruitment Threshold for Persons with Disabilities
During the year under review, the County Assembly recruited twenty-one (21) employees
excluding any person living with disability. This was contrary to the provisions of Section
B.23(2) of the Human Resource Policies and Procedures Manual for the Public Service,
2016 on rights and privileges of persons with disabilities.
167.2 Non-Compliance with Staff Ethnic Diversity Composition Threshold
Review of the County Assembly payroll for June, 2023 revealed that the County Assembly
had a total of one hundred and fifty-six (156) employees out of which one hundred and
forty-nine (149) or 95.5% were from the local dominant community. This was contrary to
Section 7(1) and (2) of the National Cohesion and Integration Act, 2008 which stipulates
that all public establishments shall seek to represent the diversity of the people of Kenya
in employment of staff, and that no public establishment shall have more than one third
of its staff from the same ethnic community. In addition, the County Assembly recruited
twenty-one (21) employees during the year, all from the local dominant ethnic community.
This was contrary to Section 65(1)(e) of the County Government Act, 2012 which requires
64
that in selecting candidates for appointment, the County Public Service Board shall
consider the need to ensure that at least thirty percent of the vacant positions at entry
level are filled by candidates who are not from the dominant ethnic community in the
country.
167.3 Failure to Adhere to Probation Terms of Service
Review of the Integrated Personnel Payroll Database (IPPD) records revealed that the
County Assembly had a total of one hundred and fifty-six (156) employees as at
30 June, 2023 out of which ten (10) were serving on probation terms. It was however,
noted that these employees had worked for periods ranging from twelve (12) months to
ten years contrary to the provisions of Section 3.1 of Makueni County Assembly Human
Resource Manual on appointment of staff on probation and pensionable terms.

168. Weaknesses in Imprests Management
Kshs.381,390,355. Included in the amount is domestic travel and subsistence allowances
expenditure of Kshs.72,896,888 as disclosed in Note 5 to the financial statements.
Review of supporting documents revealed that the County Assembly incurred expenditure
of Kshs.64,699,865 through refunds for daily subsistence allowances to employees. The
officers did not apply for imprests through imprest warrants. In addition, the imprest
register maintained by the County Assembly did not reflect the date the imprest was
issued, its purpose, amount surrendered and balance outstanding. This contravenes the
provisions of Regulations 91(2) and 93(4) of the Public Finance Management (County
Governments) Regulations, 2015 which require proper accountability for imprests.
In the circumstances, the effectiveness of internal controls on imprest management could

not be confirmed.
Review of payroll records provided for audit revealed that the County Assembly operated
two payroll systems that is; a manual (excel format) payroll system and the Integrated
Personnel and Payroll Database (IPPD) system. In the year under review, emoluments
totalling Kshs.31,908,185 were processed through the manual payroll. The use of the
manual system involves manual calculations of deductions to arrive at net monthly pay,
and constant updates of the data, which makes it prone to human errors.
65
In the circumstances, there were weak internal controls on management of personnel
emoluments.
170. Lack of an Audit Committee
Review of the operations and structures of the County Assembly revealed that the it
operated without an audit committee during the year under review. The previous
committee members tenure had expired having been appointed on 1 January, 2019 for
three (3) years.
In the circumstances, Management did not get assurance on effectiveness of the

operation and necessary policy direction from the Audit Committee.
66
COUNTY ASSEMBLY OF NYANDARUA – NO.18

statements reflects compensation of employees amounting to Kshs.305,842,391.
However, the following unsatisfactory matters were noted:-
171.1 Unsupported Payment of Special House Allowance
The compensation of employees amount includes an amount of Kshs.106,625,953 in

respect of personal allowances paid as part of salary which further includes an amount of
Kshs.70,099,213 paid as special house allowance. However, Management did not
provide approval from the Salaries and Remuneration Commission to support payment
of the special house allowance.
171.2 Unsupported Mileage Allowances
Further, included in the compensation to employees amount is an amount of

Kshs.106,625,953 in respect of personal allowances paid as part of salary. The personal
allowances further include an amount of Kshs.9,148,932 in respect of mileage allowances
paid to Members of County Assembly (MCAs). However, review of the supporting
documents on the mileage allowances revealed that claims were not supported by copies
of motor vehicle log books or lease agreements as proof of ownership of motor vehicles
used by the respective Members while travelling from the County Assembly offices to
their respective Ward offices.
In the circumstances, the accuracy and propriety of the compensation to employees

amount totalling Kshs.79,248,145 could not be confirmed.
171.3 Variance in Transfers from County Treasury
The statement of receipts and payments reflects transfers from County Revenue Fund
(CRF) of Kshs.897,532,346 as disclosed in Note 1 to the financial statements. However,
the County Revenue Fund financial statements reflected transfers to the County
Assembly amount of Kshs.876,225,353 resulting to an unreconciled variance of
Kshs.21,306,993.
In the circumstances, the accuracy of the transfers from County Revenue Fund of
67
Emphasis on Matter
171.4 Pending Bills
Annex 1 of the financial statements on other disclosures reflects pending accounts

payable of Kshs.108,425,658, comprising of payables in respect of construction of
buildings, supply of goods and supply of services. However, the balance was not
supported by detailed aging analysis and supporting schedules for the opening balances,
breakdown of the pending bills paid during the year and the aging analysis of the balance
as at 30 June, 2023.
Failure to settle bills during the year to which they relate adversely affects the budgetary
provisions of the subsequent year to which they are charged as they form a first charge.
Other Matter
Resources. However, the Management did not resolve the issues or provide any
explanation for failure to resolve the issues.

RESOURCES
173. Failure to Implement E-Procurement System
Review of procurement records revealed that during the year, procurement of goods and
services through request for quotations was done outside the Integrated Financial
Management Information System (IFMIS). This was contrary to the requirement of
Regulation 49(2) of the Public Procurement and Asset Disposal Regulations, 2020 which
states that the conduct of e-procurement procedures for the supply of goods, works and
services shall be carried out by a procuring entity using an e-procurement system which
is integrated to the State Portal.
Review of human resource records revealed that the County Assembly had two hundred
and fourteen (214) employees as at 30 June, 2023, out of which two hundred and three
(203) members equivalent to 95 % of the total employees were from the dominant ethnic
Community. This was contrary Section 7(2) of the National Cohesion and Integration Act,
68
2008 which states that no public establishment shall have more than one third of its staff
from the same ethnic community.
In the circumstance, Management was in breach of the law.
175. Non-Compliance with One Third Rule on Salary Deduction
Analysis of sampled staff from the payroll revealed that sixty-six (66) employees were
earning less than one third of their basic salaries in different months. This was contrary
to Section 19(3) of the Employment Act, 2007 which provides that without prejudice to
any right of recovery of any debt due, and notwithstanding the provisions of any other
written law, the total amount of all deductions made by an employer from the wages of
his employee at any one time shall not exceed two-thirds of such wages.
176. Late Remittance of Statutory Deductions
Review of records indicated that Management did not remit deductions and contributions
owed to the National Social Security Fund (NSSF) of Kshs.1,008,400 and National
Hospital Insurance Fund (NHIF) of Kshs.590,700 respectively as at 30 June, 2023 within
the statutory timelines. This was contrary to Section 19(4) of the Employment Act, 2007,
which states that an employer who deducts an amount from employee’s remuneration in
accordance with subsection 19(1) (a), (f), (g) and (h) shall pay the amount so deducted
in accordance with time period and other requirements specified in law, agreement, court
order or arbitration as the case a may be.
177. Irregular Payment of House Allowance to the Speaker of the County

Assembly
Analysis of the July, 2022 to June, 2023, Integrated Payroll and Personnel Database
(IPPD) revealed that the Speaker of the County Assembly was paid rental house
allowance amounting to Ksh.640,000. This was contrary to the Salaries and
Remuneration Commission Circular Ref. No: SRC/ADM/11 dated 27 June, 2022, which
stipulates that the option for County Governments paying rent/leasing official residential
houses for Governors, Deputy Governor and County Assembly speaker shall cease on
30 June, 2022 as earlier communicated.
In the circumstances, Management was in breach of the law
178. Direct Payments of Subsistence Allowances to County Assembly Staff

Outside IFMIS
Review of payment vouchers totalling Kshs.60,123,100 revealed that the County

Assembly paid its staff imprests and subsistence allowances directly through selected
banks avoiding individual requisitions of imprest through Integrated Financial
Management Information System (IFMIS). In addition, the County Assembly incurred an
69
amount of Kshs.24,203,795 on foreign travel and subsistence allowance. It was however,
noted that the officers proceeded on foreign trips before being issued with imprest and
made claims after returning from the assignments. This was contrary to Regulation 93(3)
Public Finance Management (County Governments) Regulations, 2015 which provides
that temporary imprests shall be issued mainly in respect of official journeys and are
intended to provide officers with funds with which they can meet travelling,
accommodation and incidental expenses. Management did not explain the necessity why
officers financed the foreign trips and sought refunds later.
179. Irregular Payments on Subscriptions and Memberships
The statement of receipts and payments reflects expenditure on use of goods and
services totalling Kshs.309,132,070 which, as disclosed in Note 5 to the financial
statements includes an amount of Kshs.28,830,605 in respect of other operating
expenses. Included in the operating expenses were payments of Kshs.2,500,000 and
Kshs.500,000 made to the Society of Clerks At The Table (SOCATT) and County
Assemblies Forum (CAF) respectively as annual subscription fees. However,
Management did provide justification for the payments to the two organizations without
legal or policy framework that support payment of subscriptions to the two organizations.
In the circumstances, the regularity of the payments of Kshs.3,000,000 could not be

confirmed.
180. Irregular Payment of Legal Expenses
Annex 1 of the financial statements on other disclosures reflects pending accounts

payable of Kshs.108,425,658 which includes payables in respect of legal services
amounting to Kshs.34,891,150. However, the legal services were not included in annual
procurement plan for the year under review. This was contrary Section 45(3)(a) of Public
Procurement and Asset Disposal, Act 2015 which provides that all procurement
processes shall be within the approved budget of the procuring entity and shall be planned
by the procuring entity concerned through an annual procurement plan.
Further, the Management did not provide the relevant procurement records to confirm
that the legal firms were competitively identified and engaged. This was contrary to
Section 44(2)(d) of the Public Procurement and Asset Disposal Act, 2015 which provides
that in the performance of the responsibility under subsection (1), an accounting officer
shall ensure proper documentation of procurement proceedings and safe custody of all
procurement records in accordance with the Act.
181. Delayed Projects Completion
Review of the project’s implementation records revealed that the following projects were
not completed within the contract period stipulated in the contract agreements:
70
181.1 Proposed Construction of Office Block at the Existing Nyandarua County
Assembly
The Construction of office block at the existing Nyandarua County Assembly at a cost of
Kshs.535,000,000 which commenced on 17 October, 2017 was expected to be
completed in May, 2019. However, audit inspection carried out in the month of
October, 2023 revealed that the project was incomplete. Further, Management did not
provide for audit review the project files detailing the status of the project.
181.2 Proposed Construction of Speaker’s Official Residence
The construction of Speaker’s official residence at a cost of Kshs.37,799,670 commenced

on 16 June, 2020 and was expected be completed on 26 January, 2021. However, audit
inspection carried out in the month of October, 2023 revealed that the project was
incomplete. In addition, Management did not provide for audit review the project progress
reports and completion certificates of certified works.
In the circumstances, value for money spent on the projects have been realized due
delayed completion of the projects.

AND GOVERNANCE
182. Lack of Effectiveness of Assets Management and Controls
Review of the fixed asset register revealed that the asset register maintained was not
properly updated and detailed supporting schedules and analysis for each asset category
was not provided for audit review. Relevant details in regard to the land size, land values
for the parcels of land owned by the County Assembly, key assets information including
date of acquisition, costs, accumulated depreciation, net book values, assets locations
and codes were not included in the asset register. Management did not provide title deeds
for the parcels of land owned by the County Assembly. It was therefore not possible to
confirm the ownership status and security of the County Assembly’s land.
Further, Management did not provide evidence that the major assets were valued since
the year 2014. In Addition, Management did not provide records for assets count and
verification carried at regular intervals to confirm existence and condition of the recorded
assets. It was noted that most of the assets were not tagged and asset movement
registers were not properly maintained. Although there were some unserviceable assets
which were already bonded there was no evidence of disposal of any assets in the last
three years to save on storage costs, space and obtain better salvage value.
In addition, the fixed asset register maintained revealed that laptops issued to some
officers were missing. Management did not provide measures put in place to recover the
missing laptops from the concerned officers.
71
In the circumstances, the effectiveness of the County Assembly’s asset management
system and its ability to safeguard the County Assembly assets could not be confirmed.
72
COUNTY ASSEMBLY OF NYERI - NO.19
183. Variances in Statement of Receipts and Payments
Review of the financial statement generated from the Integrated Financial Management
Information System (IFMIS) and the balances reflected in the statement of receipts and
payments revealed variances under Exchequer releases and use of goods and services
which have not been reconciled as shown below.
IFMIS
Financial Financial
Statements Statements-
Balances Balances
Financial statement 2022/2023 2022/2023 Variance
Component Note (Kshs.) (Kshs.) (Kshs.)
Exchequer Releases 1 734,121,427 719,389,972 14,731,455
Use of Goods and Services 5 392,862,238 393,150,018 (287,780)
Further, the annual report and trial balance had a total debit and credit balances of
Kshs.734,121,427 while the IFMIS trial balance had Kshs.10,608,725,887 resulting to un-
explained and unreconciled variance of Kshs.9,874,604,460.
In the circumstances, the completeness and accuracy of the two balances reported in the
statement of receipts and payments could not be confirmed.
184. Irregular Payment of Special Salary and House Allowance
Review of the payroll records revealed that the Clerk and a member of the County
Assembly Service Board were being paid special salary without disclosure of basic salary.
The clerk was also paid a special house allowance. It was not clear under what
circumstances the officers were paid the special salary yet there is a job group attached
to them.
In addition, review of Integrated Payroll and Personnel Database (IPPD) revealed that the
speaker to the County Assembly earned rental house allowance amounting to
Ksh.640,000. This was contrary to Salaries and Remuneration Commission Circular Ref.
No: SRC/ADM/11 dated 27 June, 2022, which stipulated that the option for County
Governments paying rent/leasing official residential houses for Governors, Deputy
Governor and County Assembly speaker shall ceases on 30 June, 2022.
In the circumstances, the regularity of the rental expenditure amounting to Kshs.640,000

73
185. Irregular Payment of Ward Administration Expenses
The statement of receipts and payments reflects use of goods and services amounting
to Kshs.392,862,238 which, as disclosed in Note 5 to the financial statements includes
other operating expenses totalling Kshs.48,552,059. The other operating expenses
includes reimbursement totalling Kshs.22,242,003 made to forty-four (44) MCAs as
claims for expenditure incurred in running the ward operational costs. Further, it was not
clear why the MCAs were incurring costs for their ward offices and then making claims
as reimbursements for costs incurred. In addition, a memorandum cash book to record
all receipts and payments and the balance on hand was not maintained by the officers.
In the circumstances, the regularity of the expenditure amounting to Kshs. 22,242,003

186. Irregular Rent and Rates
Kshs.392,862,238. The amount includes other rental of produced assets totalling
Kshs.4,479,000 paid to various landlords for having leased their properties to Members
of County Assembly (MCAs) to use as their offices. Review of the payment details report
and other provided documents revealed that no competitive procurement was done and
no market survey was conducted to establish the prevailing market prices on rental
houses. Further, a standard amount of Kshs.10,000.00 per month was being paid to the
landlords from the month of July to September, 2022 and from 1 October, 2022 to
30 June, 2023, the monthly payment was increased to Kshs.11,000. The engagement of
these landlords to provide these services was against the Public Procurement and Asset
Disposal Act, 2015, Section 103 (2) guideline on when direct procurement may be used.
In the circumstances, the propriety of the expenditure amounting to Kshs. 4,479,000 could
not be confirmed.
Emphasis of Matter
187. Pending Accounts Payable
Other Disclosures Note 1 to the financial statements reflects pending accounts payable
amounting to Kshs.20,879,640 as disclosed in annex to the financial statements which
were not paid in the year under review but were carried forward to 2023/2024 financial
year.
Failure to settle the bills during the year in which they relate distorts the financial
statements and adversely affect the budgetary provisions for the subsequent year as they
form a first charge.
74
Other Matter
188. Unresolved Prior Year Audit Matters
explanation for failure to act on the recommendations.

RESOURCES
189. Irregular Payment of Subscription Fees
The statement of receipts and payments reflects use of goods and services amounting
to Kshs.392,862,238 which, as disclosed in Note 5 to the financial statements includes
other operating expenses amounting to Kshs.48,552,059. The other operating expenses
includes an amount of Kshs.750,000 paid as subscription fees to the Society of Clerks-
at-the-Table (SOCATT) and Kshs.1,500,000 paid to the County Assemblies Forum (CAF)
all totalling Kshs.2,250,000. However, there was no legal basis for the establishment of
CAF and SOCAT. The payments are therefore not a proper charge of public resources.
190. Compensation of Employees and other Staff Matters

190.1 Irregular Extension of Service for Retired Employees
The County Assembly Service Board extended the services of three (3) officers who had
attained the mandatory retirement age of sixty (60) years for a period of one year. It was
not clear under what circumstances the services were extended. Further, there was no
evidence to show that there were no suitable persons to fill the vacancies.
190.2 Non-Compliance with the Thirty Percent Rule Ethnic Composition of

Employees
Review of human resource records revealed that the County Assembly had sixty-five (65)
permanent employees out of which sixty (60) or ninety-two (92%) per cent were from the
dominant ethnic Community. This was contrary to Section 7(2) of the National Cohesion
and Integration Act, 2008 which states that no public institution shall have more than one
third of its staff establishment from the same ethnic community”.
75
191. Irregular Commutation of Leave
During the year under review, the County Assembly paid Kshs.7,108,042 for leave
commutation. Review of records revealed that 62 and 61 staff members commuted part
or full leave days entitlement for the financial years 2021/2022 and 2022/2023
respectively. Further, commutation of leave was not authorized. This was contrary to
Section E.4 of the Human Resource Policies and Procedure Manual for the Public Service
2016, which prohibits commutation of leave for cash except on exceptional
circumstances.

192. Irregular Payment of Foreign Travel and Subsistence Allowance
foreign travel and subsistence totalling Kshs.71,156,692. However, review of records
revealed that the officers were not issued with imprests while proceeding on foreign
countries on official duties. Instead the officers used their money and later claimed for
refund. This was contrary to Regulation 93(3) of the Public Finance Management (County

AND GOVERNANCE
193. Lack of Land Ownership Documents
Annex 4 to the financial statements reflects historical cost of non-current assets

amounting to Kshs.225,990,450. The amount includes land and buildings and structures
amounting to Kshs.19,000,000 and Kshs.89,471,629 respectively. However, land
ownership documents such as title deeds or allotment letters were not provided. Further,
the building and structures have not been revalued. In addition, inventory of the non-
current assets was not provided.
In the circumstances, the effectiveness of the internal controls on asset management in

place could not be confirmed.
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COUNTY ASSEMBLY OF KIRINYAGA – NO.20
194. Variance Between the Financial Statements and Integrated Financial

Management Information System (IFMIS) Balances
The statement of receipts and payments reflects total payments of Kshs.718,606,854.

However, review of the ledger balances in the Integrated Financial Management System
(IFMIS) revealed total expenditure of Kshs.728,328,236 resulting to unexplained and
In the circumstances, the accuracy and completeness of total payments of

Kshs.718,606,854 as at 30 June, 2023 could not be confirmed.
Emphasis of Matter
The statement of comparison of budget and actual amounts for development vote reflects
the final receipts and actual on a comparable basis totalling Kshs.60,417,240 and
Kshs.38,417,170 respectively resulting in underfunding of Kshs.22,000,070 (or 36%) of
the budget.
The underfunding affected the planned activities and may have impacted negatively on
service delivery to the public.
Other Matter

In the audit report of the previous year, various issues were raised under the Report on
Financial Statements and under Report on Lawfulness and Effectiveness in Use of Public
Resources. However, at the time of the audit review, the Management had not resolved
the issues nor given any explanation for the failure to implement the recommendations.

RESOURCES
Conclusion
Basis of Conclusion
197. Non-Compliance with the One Third of Basic Salary Rule

Review of June, 2023 payroll revealed that eleven (11) members of staff were paid net
salaries below a third of their basic pay, contrary to the provisions of Section 19(3) of the
77
Employment Act, 2007 which stipulates that without prejudice to any right of recovery of
any debt due, and notwithstanding the provisions of any other written law, the total amount
of all deductions made by an employer from the wages of his employee at any one time
shall not exceed two-thirds of such wages.
198. Non-Compliance with Ethnic Diversity
Review of records revealed that the total number of employees at the County Assembly
during the year ended 30 June, 2023 was eighty-seven (87), out of which eighty-three
(83) or 95% were from the local dominant community in the County. This was contrary to
Section 7(1) and (2) of the National Cohesion and Integration Act, 2008 which requires
that all public establishments shall seek to represent the diversity of the people of Kenya
in the employment of staff and no public establishment shall have more than one third of
its staff from the same ethnic community.
The statement of receipts and payments reflects compensation of employees’

expenditure balance of Kshs.288,573,277 as disclosed in Note 3 to the financial
statements, which is approximately 40% of the total revenue of Kshs.720,052,788. This
is 5% above the set limit of 35% contrary to Regulations 25(1)(a) of Public Finance
Management (County Governments) Regulations, 2015 which requires that County
Executives Committee Members with the approval of the County Assembly shall set a
limit on the County Governments expenditure on wages and benefits for its public officers
pursuant to Section 107(2) of the Act. In addition, Regulation 25(1)(b) provides that the
limit set under total revenue.

Conclusion
governance.
78
COUNTY ASSEMBLY OF MURANG’A – NO.21

201. Variance Between the Financial Statements and Integrated Financial

Management System (IFMIS) Reports
The statement of receipts and payments reflects payments totalling Kshs.884,405,908 for
the year ended 30 June, 2023. However, the IFMIS reports reflects total payments of
Kshs.931,966,963 resulting in an unexplained and unreconciled variance of
Kshs.47,561,055.
In the circumstances, the accuracy and completeness of the total payments amount
202. Exchequer Releases Received After Year End
The statement of receipts and payments reflects Exchequer releases amount of

Kshs.884,406,088 and as disclosed in Note 1 to the financial statements. Included in the
balance is late Exchequer release of Kshs.147,262,114 received in the month of
July, 2023 but backdated to 30 June, 2023 in the records of the County
Assembly, contrary to the International Public Sector Accounting Standards (IPSAS) -
Cash Basis reporting framework and Regulation 97(1) of the Public Finance Management
(County Governments) Regulations, 2015 which states that the accounts of the County
Assembly inter alia shall record transactions which take place during a financial year
running from the 1 July to 30 June. In addition, Regulation 97(4) of the Public Finance
Management (County Governments) Regulations, 2015, requires that an actual cash
transaction taking place after the 30 June, shall not be treated as pertaining to the
previous financial year.
In the circumstances, the accuracy and completeness of the Exchequer releases

203. Unreconciled Cash and Cash Equivalents
The statement of financial assets and liabilities reflects cash and cash equivalents
balance of Kshs.2,924,685 as disclosed in Note 13A which includes Nil balance in respect
to Murang’a County Assembly Development Account held at the Central Bank of Kenya.
However, review of the bank reconciliation statements revealed a bank balance of
Kshs.635,815 which has not been reconciled or included in the financial statements.
Further, review of Board of Survey reports on cash account revealed cash at hand
balance of Kshs.1,300 which was not included the financial statements. Further, an un-
surrendered imprest amounting to Kshs.105,200 was not disclosed in the financial
statements.
79
In the circumstances, the accuracy and completeness of cash and cash equivalents
Other Matter
In the audit report of the previous year, several issues were raised under the report on
the financial statements and report on lawfulness and effectiveness in use of public
resources. However, Management had neither resolved the issues nor given explanation
for failure to implement the recommendations.

RESOURCES
205. Non-Remittance of Statutory and Non-Statutory Deductions
The statement of financial assets and liabilities reflects pending staff payables totalling
Kshs.22,732,451 as disclosed in Other Important Disclosures, and Annex 2. Review of
the schedules supporting the financial statements and related supporting documents
revealed the following;
205.1 Un-Remitted Pension Deductions
Pension deductions payable to Local Authorities Provident Fund and Trust Fund
(LAPFUND and LAPTRUST) totalling Kshs.3,645,932 were deducted during the year
under review but not remitted as at 30 June, 2023. This was contrary to Section 33(1) of
the Retirement Benefits Act, 2012 which states that notwithstanding the provisions of any
written law for the time being in force, an employer may, with the approval of his
employees, pay any statutory contributions in respect of such employees into any
Scheme Fund prescribed for that purpose. Further, the non-remittance of the contribution
by the employer may attract interest accrued to the scheme and a penalty of five percent
of unremitted contributions or twenty thousand shillings whichever is higher.
205.2 Un-Remitted Non-Statutory Deductions
The County Assembly deducted through the payroll system an amount of Kshs.6,510,914
in respect to principal amount recovered from car loan and members mortgage, interest
recovered from car loan and members mortgage insurance premium and other
membership subscription insurance recovered from members mortgage as at 30 June,
2023. However, the amounts were not remitted promptly as required by the receiving
institutions contrary to Regulation 22(2)(a) of the Public Finance Management (County
Governments) Regulations, 2015, which provides that in addition to the responsibilities of
Accounting Officers provided in the Act, an Accounting Officer designated under the Act
or any other Act, shall comply with any tax, levy, duty, pension, commitments as may be
provided for by legislation.
80
206. Non-Compliance with the Law on Ethnic Diversity
During the year under review, the County Assembly had ninety-seven (97) employees,
out of which eighty-eight (88) or 91% were from of the dominant ethnic community in the
county. This was contrary to Section 7(1) and (2) of the National Cohesion and Integration
Act, 2008 which requires that all public establishments shall seek to represent the
diversity of the people of Kenya in the employment of staff and no public establishment
shall have more than one third of its staff from the same ethnic community.
207. Staff Emoluments Paid Outside IPPD Payroll System
The statement of receipts and payments reflects compensation of employees’

expenditure totalling Kshs.278,474,079 as disclosed in Note 4 to the financial statements.
Included in the expenditure is an amount of Kshs.1,619,394 being seven months
emoluments paid during the year in respect of a Member of the County Assembly (MCA)
paid through manual payment vouchers outside the Government recommended
Integrated Personnel and Payroll Database (IPPD) Management System. This was
contrary to The National Treasury Circular No.16/2020 which requires personnel
emoluments to be controlled in the public personnel database and supported by IPPD.
208. Irregular Payments of Subscription to County Assembly Forums
statements reflects payments totalling Kshs.408,666,471 in respect of use of goods and
services. Included in this amount are other operating expenses totalling Kshs.24,727,889
out of which an amount of Kshs.830,000 was paid as subscription fees to the County
Assemblies Forum (CAF) and the Society of Clerks-at-The Table (SOCATT). Further,
review of pending bills payables revealed an amount of Kshs.20,300,000 payables to
County Assembly Forums that has been pending for inordinately long time. However,
there is no enabling legislation establishing these bodies nor policies and guidelines
enacted by the County Assembly for such payments.

Conclusion
governance.
81
COUNTY ASSEMBLY OF KIAMBU – NO.22

210. Unreconciled and Unsupported Cash and Cash Equivalents
The statement of assets and liabilities reflects a balance of Kshs.73.65 in respect of cash
and cash equivalents as disclosed in Note 13 to the financial statements. However, review
of the cash books provided for audit revealed that the opening balances for the recurrent
cash book for the months of October, 2022 was an overdraft of Kshs.145,076,591 differed
with the previous months closing balance of overdraft of Kshs.134,515,631 resulting to
an unreconciled variance of Kshs.10,560,960. Similarly, the opening balance for the
month of June, 2023 of Kshs.298,098,817 differed with the closing balance of the
previous month Kshs.333,457,201 resulting to an unreconciled variance of
Kshs.35,358,384.
Further, the bank reconciliation statement for the month of June, 2023 included
unpresented cheques amounting to Kshs.361,908,203 out of which cheques amounting
to Kshs.84,202,901 were stale as at 30 June, 2023. No explanation was provided why
the stale cheques were not written back to the cash book and no operations accounts
bank reconciliation statements and cash books were not provided for audit.
In the circumstances, the accuracy and completeness of the cash and cash equivalents
balance of Kshs.73.65 could not be confirmed.
211. Unsupported Training Expenditure
The statement of receipts and payments reflects an amount of Kshs.576,937,962 in

respect of use of goods and services which, as disclosed in Note 5 to the financial
statements includes training expenses amount of Kshs.69,054,914. Review of payment
vouchers amounting to Kshs.12,764,730 revealed that various staff attended trainings
outside the country. However, the imprest issued and surrendered was not supported
with documents such as boarding passes, copies of passports with stamp of entry and
exit of the foreign country, attendance registers and travel clearance. Further, review of
the payment vouchers, revealed that some imprests issued lacked application by the
attendee and authority for the imprest applied. In addition, review of the invoices revealed
that the County Assembly made payments for training of participants, but the number of
staff who attended the training were less than those indicated in the invoices.
In the circumstances, the completeness of the training expenditure amounting to

82
Emphasis of Matter
which reflects final approved receipt budget and actual amount on comparable basis
amounting to Kshs.1,628,012,830 and Kshs.1,186,374,088 respectively, resulting in
under-collection of revenue amounting to Kshs.441,638,742 or 27% of the budget.
Similarly, the statement reflects final expenditure budget and actual amount on
comparable basis totalling Kshs.1,628,012,830 and Kshs.1,186,374,014 respectively
resulting in an under-performance amounting to Kshs.441,638,816 or 27% of the budget.
The under collection and under expenditure have affected the planned activities and
negatively impacted on service delivery to the citizens of Kiambu County.
As disclosed in Note 1 and 2 - Other important disclosures to the financial statements,

the County Assembly reported pending bills balances of Kshs.100,381,692 and
Kshs.26,206,752 relating to pending accounts payable and pending staff payables
respectively out of which pending bills amounting to Kshs.18,386,738 were not supported
by payment vouchers and other supporting documents. Further, pending bills totalling
Kshs.19,760,646 relate to the financial year 2021/2022. In addition, review of the pending
bills documents provided for audit revealed that legal fees amounting to Kshs.11,300,729
which had been recognized as contingent liabilities were not disclosed as pending bills
despite each legal case having a fee note raised hence understating the pending bills
balance by the same amount.
Failure to settle the bills during the year in which they relate distorts the financial
statements and adversely affect the budgetary provisions for the subsequent year as they
form a first charge.
My opinion is not modified in respect of these matter.
Other Matter
The audit report for the year ended 30 June, 2022 raised several unsatisfactory issues in
regard to balances reflected in the financial statements, lawfulness and effectiveness in
use of resources and effectiveness of internal controls, risk management and
governance. However, the issues remained unresolved as at 30 June, 2023.
83
RESOURCES
compensation of employee’s expenditure amounting to Kshs.513,257,415 representing
43% of the total revenue of Kshs.1,186,374,088 which translates to eight percentage
points over and above the fiscal guidelines of 35%. Further, Management did not submit
for audit the County Executive Committee Member for Finance prescribed threshold of
wages and benefits as a percentage of Assemblies revenue to be adhered to towards
enforcement of fiscal responsibility principles and the approval of the same by the County
Assembly. This was contrary to Regulation 25(1)(a) and (b) of the Public Finance
Management (County Governments) Regulation, 2015 which states that the County
Executive Committee Member with the approval of the County Assembly shall set a limit
on the County Government’s expenditure on wages and benefits for its public officers and
the limit shall not exceed thirty-five (35) percent of the County Government’s total
revenue.
216. Delay in Confirmation of Employees
Review of personal files provided for audit revealed that eight (8) employees who were
appointed on 28 January, 2022 had not been confirmed in writing as per their appointment
letters. No explanation was provided why the employees had not been confirmed despite
having completed their probation periods. This was contrary to provisions of the Public
Service Commission Human Resource Policies and Procedure Manual May, 2016 which
states that the supervisor will make a report on the officer’s suitability for confirmation or
otherwise at least one (1) month before the end of the probationary period and inform the
officer accordingly and where the supervisor fails to submit a report during the
probationary period, the officer shall be confirmed in appointment.
During the year under review, the County Assembly made deductions and or recoveries
from several employees more than two thirds of their gross pay. Further, review of the
payroll revealed that some employees had negative net pay. This was contrary to Section
19 of the Employment Act, 2007 on deduction of wages which provides that the total
amount of all deductions which under the provisions of subsection (1), may be made by
an employer from the wages of his employee at any one time shall not exceed two-thirds
of such wages or such additional or other amount as may be prescribed by the Minister
either generally or in relation to a specified employer or employee or class of employers
or employees or any trade or industry.
84
Review of employee records for the County Assembly revealed that the County Assembly
had employed a total population of ninety-six (96) staff out of whom eighty (80) employee
or 83% were from the dominant ethnic community in the County . This was contrary to
the provisions of Section 7(1) and (2) of the National Cohesion and Integration Act, 2008
which states that all public officers shall seek to represent the diversity of the people of
Kenya in employment of staff and that no public institution shall have more than one third
of its staff establishment from the same ethnic community.
219. Irregular Payments to Society of Clerks at the Table and County Assembly
Forum
Review of payment vouchers relating to membership fees, dues and subscriptions to

professional and trade bodies revealed that an amount of Kshs.5,448,000 was paid to
Society of Clerks at the Table and County Assembly Forum. However, the payments were
made without budget allocation and requisite in line with Regulation 31(a) and 50(2) of
the Public Finance Management (County Governments) Regulations, 2015 which
requires that all expenditure shall be entered into the budget and shall be committed only
against allocation and commitments approval.
220. Irregular Rental of Ward Offices
The statement of receipts and payments and Note 5 to the financial statements reflects
use of goods and services amounting to Kshs.576,937,962 which includes rentals of
produced assets amounting to Kshs.18,974,000. During the year under review, the
County Assembly rented offices for the Members of the County Assembly. However, it
was not possible to confirm if the process of renting the twenty-four (24) ward offices at a
monthly rent of Kshs.341,900 was fair and competitive in the absence of the quotation
documents from the suppliers, lease agreements, ownership documents and tax
compliance certificates.
Further, review of procurement documents provided for audit revealed that various
bidders were awarded the contracts for rental of ward offices without the required
documents which include tax compliance certificates, tax pin and ownership documents
as per the criteria set in the quotation documents. This was contrary to Section 58(2) of
the Public Procurement and Asset Disposal Act, 2015 which states that “the tender
documents used by a procuring entity under Section 58(1) shall contain sufficient
information to allow fairness, equitability, transparency, cost-effectiveness and
competition among those who may wish to submit their applications.
85
221. Idle Assets
Review of the County Assembly operations during the year under review revealed that
the County Assembly procured a biometric system in 2017 at a cost of Kshs.1,316,020,
for use by the Members of the County Assembly when conducting various planned
activities for their respective committees. However, an audit inspection carried out
revealed that the system was not in use in the committee rooms. This was contrary to
Regulations, 2015 which provides that the Accounting Officer shall ensure that processes
and procedures both electronic and manual are in place for the effective, efficient,
economical and transparent use of the Government entity’s assets.
In the circumstances, value for money on the idle assets could not be confirmed.
222. Irregular Procurement
222.1 Printing and Advertisement Services
During the year under review, the County Assembly procured invoice, delivery and
counter receipt vouchers (S13) booklets from a local supplier for Kshs.414,200 who was
not among the prequalified suppliers. Further, the County Assembly procured advertising
services from a local media company for revenue and expenditure advertisement
amounting to Kshs.290,000. However, review of the payment voucher revealed that the
Local Service Order was written in favour of a different service provider. This was contrary
to Section 114(1) of the Public Finance Management (County Governments) Regulations,
2015 which states that all purchases of goods, works and services from suppliers,
including capital investments, shall comply with the provisions prescribed in the Public
Procurement and Asset Disposal Act, 2015, and the Regulations made thereunder and
shall have the prior approval of the Accounting Officer.
222.2 Irregular Procurement of Office Furniture and Equipment
Review of sampled payment vouchers for supply of orthopaedic seats, desks and
cabinets revealed that the office furniture was procured through request for quotations
where four (4) local purchase orders totalling Kshs.7,387,720 were awarded to four
suppliers. However, the quotations were split for the supply of the listed office furniture to
avoid open tender contrary to Section 54(1) of the Public Procurement and Asset Disposal
Act, 2015 which states that no procuring entity may structure procurement as two or more
procurements for the purpose of avoiding the use of a procurement procedure except
where prescribed. Further, the distribution lists for the office furniture were not provided
for audit.
In addition, two local purchase orders dated 27 March, 2023 and 28 February, 2023 were
issued to a local supplier for supply of 26 office tables at Kshs.20,000 each and 26
orthopedic seats at Kshs.39,960 each. However, invoices and delivery notes indicated 27
orthopedic seats and 27 office tables were supplied. No explanation was provided why
there was one seat and desk supplied in excess of the local purchase order. This was
contrary to Regulation 114(1) of the Public Finance Management (County Governments)
Regulations, 2015 which states that all purchases of goods, works and services from
suppliers, including capital investments, shall comply with the provisions prescribed in the
86
Public Procurement and Asset Disposal Act, 2015, and the Regulations made thereunder
and shall have the prior approval of the Accounting Officer.
222.3 Wastage of Public Funds on Office Rent for Members of County Assembly
Review of ward documents provided for audit revealed that the County Assembly entered
into a lease agreement with a local company on 1 February, 2023 for office space for
Nominated Members of County Assembly (MCAs) in Kiambu town at a cost of
Kshs.3,014,237 per quarter. Audit inspection carried out in the month of
September, 2023 at the rented premises revealed that only eleven (11) offices were
occupied out of the thirty (30) available within the premises. The County Assembly
incurred a total amount of Kshs.13,396,608 for rental expenses during the year under
review while the offices remaining unoccupied. Further, there was no signage at the
entrance of the building to show which floors the Nominated MCAS were occupying for
ease of service delivery. This was contrary to Regulation 139(2) of the Public Finance
Management (County Governments) Regulations, 2015 which provides that the
Accounting Officer shall ensure that processes and procedures both electronic and
manual are in place for the effective, efficient, economical, and transparent use of the
Government entity’s assets.
It was further observed that one Member of the County Assembly had occupied two
offices and no explanation was provided for this anomaly. It was noted that the Nominated
MCAs have 3 partisan staff each, whose contracts commenced in the month of
November, 2022. However, only eleven (11) staff out of the seventy-eight (78) were within
the premises at the time of the verification and no records were maintained to show that
the absentees reported to work despite incurring an amount of Kshs.12,254,909 in
salaries.
222.4 Irregular Contract Variation of Office Partitioning
Review of the procurement documents provided for audit revealed that the procurement
for office partitioning was awarded to a local contractor at a contract price of
Kshs.3,799,240 on 3 April, 2023. However, the contract duration was not included in the
contract. Further, a meeting held by the Contract Implementation Committee on 19 April,
2023 revealed that the contractor requested for a contract variation by Kshs.836,444
(22%) which was approved by the Committee resulting to a new contract price of
Kshs.4,633,714. However, the contract variation was done before lapse of one year
contrary to Section 139(1) of the Public Procurement and Asset Disposal Act, 2015 which
states that, an amendment or a variation to a contract resulting from a procurement
proceeding is effective only if no contract price shall be varied upwards within twelve
months from the date of the signing of the contract.
222.5 Irregular Procurement of Conference Facilities
Review of procurement documents provided for audit revealed that the County Assembly
procured services for provision of conference facilities directly from a local hotel for
Kshs.2,100,000 on 24 to 28 October, 2022 for the Members induction. This was despite
the County Assembly, having entered into framework contracting for provision of
conference facilities. Further, it was noted that the contracted hotel was not prequalified
87
or issued with framework contracts for the provision of conference facilities, and the
County Assembly provided only a quotation for the supplier indicating the quoted amounts
for the services. No explanation or reasons were provided for audit review on the use of
direct procurement for the conference facilities and the prior approval in writing by the
Accounting Officer for use of the direct procurement method. This was contrary to Section
103(2) of the Public Procurement and Asset Disposal Act, 2015 which states that; a
procuring entity may use direct procurement if the goods, works, or services are available
only from a particular supplier or contractor, or a particular supplier or contractor has
exclusive rights in respect of the goods, works or services, and no reasonable alternative
or substitute exists.
222.6 Irregular Award of Guarding Services Contract

During the year under review, the County Assembly incurred an amount of
Kshs.2,056,990 on contracted guarding services from a local security firm. Review of the
procurement documents provided for audit revealed that the County Assembly used
request for quotation to procure the services and the contract was awarded on
1 February, 2021. However, review of the evaluation committee minutes revealed that the
preliminary evaluation for the registration of suppliers for the financial year 2022/2023
and 2023/2024 category no: CAK/06/2022-2024 revealed that the awarded security firm
did not meet the set criteria and was not among the prequalified suppliers. This was
contrary to Section 114(1) of the Public Finance Management (County Governments) Act,
2015 which states that all purchases of goods, works and services from suppliers,
including capital investments, shall comply with the provisions prescribed in the Public
Procurement and Disposals Act, 2015, and the Regulations made thereunder and shall
have the prior approval of the Accounting Officer.
222.7 Non-Compliance with Framework Contracting
Review of procurement documents revealed that the County Assembly entered into
framework agreements for the provision of conference facilities, air ticketing services,
legal, renovation and landscaping and provision of photocopier repairs. However, review
of the prequalified suppliers under the framework contracting revealed that the number of
prequalified suppliers did not meet the required threshold of 7 suppliers per each
framework contract. This was contrary to Regulation 114(1)(b) of the Public Procurement
and Asset Disposal Regulations, 2020 which states that a procuring entity may enter into
a framework agreement through open tender which shall specify the number of suppliers
or contractors which shall not be less than seven alternative vendors.
222.8 Irregular Proposed Office Renovation Work
The County Assembly Service Board (CAKSB) of Kiambu held a meeting on
12 January, 2023 to approve the request for renovation of Bahati Social Hall in Thika sub-
county for use by the Member for Hospital Ward. Review of the procurement files provided
for audit revealed that a local contractor was awarded the contract at a contract sum of
Kshs.1,195,500 under quotation No.1185811-3-2022/2023. However, the quotation
evaluation minutes were not provided for audit and regret letters were not stamped
received by the two unsuccessful bidders hence there was no evidence that the letters
were sent. Further, the inspection and acceptance report dated 22 June, 2023 approved
the works as per payment certificate No 1 of Kshs.1,195,500. However, the completion
88
certificate and hand-over reports were not provided for audit. This was contrary to Section
114(1) of the Public Finance Management (County Governments) Regulations, 2015,
which states that all purchases of goods, works and services from suppliers, including
capital investments, shall comply with the provisions prescribed in the Public Procurement
and Asset Disposal Act, 2015, and the Regulations made thereunder and shall have the
prior approval of the Accounting Officer.
In the circumstances, Management was in breach of the law and value for money have
not been obtained.
223. Legal Expenses
223.1 Wasteful Expenditure in Relation to County Assembly Staff
The County Assembly paid an amount of Kshs.2,558,895 to a local law firm in a case of
County Assembly Staff verses the Kiambu County Assembly Service Board. The Court
gave a judgement on the matter on 26 September, 2022 where the respondents were
condemned to pay a cost of Kshs.874,055. Further, an amount of Kshs.844,295 was paid
to a local law firm for another case of County Assembly Staff Vs County Assembly of
Kiambu Service Board. The judgement was delivered on 16 December, 2022. It was
further noted that Kshs.840,545 was paid to the law firm for a case of County Assembly
staff Vs County Assembly of Kiambu Service Board and the Court gave a Judgement on
11 February, 2022.
Review of legal documents provided for audit revealed that the three Ex-Parte applicants
were staff of Kiambu County Assembly seconded to Kiambu County Executive whose
services were no longer required by the Speaker. However, the staff had been removed
from the County Assembly payroll and had their salaries and other accrued benefits
withheld without their consent. An order was issued by the Court compelling the Kiambu
County Assembly to facilitate the respondent’s dues with their previous roles, full salaries,
seniority and responsibilities prior to their secondment.
223.2 Wasteful Expenditure in Relation to Motor Vehicle Compensation
Review of legal documents provided for audit revealed that a County Assembly vehicle
was involved in an accident with another motor vehicle was repaired at a cost of
Kshs.601,040 on 10 March, 2014. It was noted that, the County Assembly had paid
premiums with a local insurance company for the County vehicle for the year 2014/2015
which were fully paid under policy No.100/070/1/003874/2014. The local insurance
company failed to compensate the complainant when the County Assembly had their
pending bill of Kshs.55,000,000 at that moment. The County Assembly ended up paying
a local law firm who was the complainant lawyer a cost of Kshs.1,545,727 and the County
Assembly lawyer an amount Kshs.370,000. These payments were irregular as the County
Assembly should have compelled the contracted local insurance company to compensate
the plaintiff since they had paid premiums for the specific County motor vehicle.
In the circumstances, value for money was not realized from the legal costs incurred in
relation to the staff and motor vehicle compensation.
89
224. Irregularities in Project Implementation
224.1 Incomplete Projects
224.1.1 Construction of Ngoliba Ward Offices
During the year under review, a contract for construction of Ngoliba ward offices was
awarded to a local contractor on 28 March, 2023 at a contract price of Kshs.7,120,351 for
a period between 12 May, 2023 to September, 2023 under tender.no 1187335-
2022/2023. Review of the project file revealed that the contractor raised the first certificate
of Kshs.2,691,624 which remained outstanding as at 30 June, 2023. Audit inspection
carried out in the month of October, 2023 revealed that the project was 37% complete,
the contractor had abandoned the site and there was no signage for the project under
construction.
224.1.2 Construction of Ngewa Ward Office
The County Assembly awarded a local contractor the contract for construction of Ngewa
ward offices on 28 March, 2023 at a contract price of Kshs.7,875,626 for a period of 16
weeks between 9 May to 18 August, 2023 under tender.no 1187295-2022/2023.
However, the acceptance letter by the winning bidder and the contract agreement were
not provided for audit review. Further, review of the project file revealed that the contractor
had raised the first certificate of Kshs.1,742,150 which remained outstanding as at 30
June, 2023. Audit inspection carried out in the month of September, 2023 revealed that
the project was 22% complete, the contract period had lapsed, and the contractor had
abandoned the site. Further, site meetings minutes to confirm regular assessment of the
project were not provided for audit review.
In the circumstances, the value for money on the expenditure on the incomplete projects
224.2 Stalled Projects
224.2.1 Construction of Assembly Archives and Member Welfare Facility
The County Assembly entered into a contract with a local contractor for construction of
County Assembly Archives and Members’ welfare facility on 28 May, 2021 under tender
no 858604-2020/2021. The contractors raised the first certificate of Kshs.9,661,240
during the financial year 2021/2022 which remained outstanding as at 30 June, 2023.
Review of the project implementation status report revealed that the project was 25%
complete. Further, audit inspection carried out on 28 September, 2023 revealed that the
contractor had abandoned the site and the building had stalled.
224.2.2 Construction of Ward Offices at Karai Ward and Bibirioni Ward
The contracts for construction of ward offices at Karai and Bibirioni wards were awarded
to a local contractor on 10 February, 2020 at a contract price of Kshs.3,965,016 each for
a period of 14 weeks starting 20 March, 2020. The contractor raised the first certificates
of Kshs.2,840,106 each in the financial year 2020/2021 which were paid. Review of the
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project implementation status report revealed that the Karai and Bibirioni ward offices
projects were 85% complete. However, audit inspection carried out in September, 2023
revealed that the contractor was not on site and the construction of both ward offices had
stalled. It was also noted that the projects had been vandalized and works done had
deteriorated due to abandonment of the projects.
In the circumstances, the value for money on the expenditure of Kshs.12,501,346 on the
stalled projects could not be confirmed.

AND GOVERNANCE
225. Irregular Drawing of Fuel
Review of records revealed that the County Assembly spent a total amount of
Kshs.459,931 to fuel vehicles. However, the fuel cards for each motor vehicle revealed
that 2,765.06 litres of petrol at a cost of Kshs.181,612 was drawn for vehicles that
consumed diesel while 1,655.18 litres of diesel at a cost of Kshs.278,319 was drawn for
vehicles that consumed petrol. Further review of the fuel statements revealed that, one
motor vehicle drew fuel amounting to Kshs.49,356 in the year under review despite being
grounded. It was observed that one fuel card was used by more than one vehicle, an
indication of weak internal control in fuel management. This was contrary to Section
149(1) of the Public Finance Management Act, 2012 which states that an Accounting
Officer is accountable to the County Assembly for ensuring that the resources of the entity
for which the officer is designated are used in a way that is (a) lawful and authorized; and
(b) effective, efficient, economical and transparent. Further, review of work tickets
provided for audit revealed that the work tickets summary which include; total distance,
miles per liters and miles per oil per litre, and the driver reports of defects were blank. In
addition, the fuel consumed did not correspond to the number of kilometers travelled with
cases of more fuel was drawn for less kilometers covered as detailed below:
Work Ticket Litres Kilometers Liters per

Number Month Drawn Travelled Kilometer
639757 Jul-23 5380 1680 0.312267658
967084 Nov-22 339.3 38 0.111995284
958006 Feb-23 501.3 180 0.359066427
752204 Sep-22 231 1219 5.277056277
967082 Nov-22 232.94 184 0.789902979
752236 Jul-22 69.99 152 2.17173882

226. Poor Management of Stores and Store Records
Audit inspection of the stores carried out in the month of September, 2023 revealed that
the store was congested and not arranged and therefore not easy to trace items within,
which was contrary to Section 160(1) and (2) of the Public Procurement and Asset
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Disposal Act, 2015. Further, there were no store bin cards to show the balances of store
items and a spot check to confirm the balance was not possible. In addition, it was not
possible to verify the receipt and issue for goods sampled for store verification amounting
to Kshs.6,910,104. Furthermore, there were notable obsolete stock despite the Disposal
Committee recommending disposal of the items.
In addition, review of motor vehicle documents revealed that the County Assembly had
eight (8) motor vehicles. However, the log books for six (6) motor vehicles were not
provided for audit review. Two motor vehicles were grounded, however corresponding
inspection reports to ascertain whether it was economical to repair the motor vehicles or
recommend for bonding were not provided for audit.
In the circumstances, it was not possible to confirm existence of effective internal

controls on motor vehicles and stores management.
227. Failure to Meet Committee Meeting Threshold and Failure to Declare Conflict
of Interest
During the year under review, the Audit Committee held only one meeting on
22 July, 2022 to discuss prior year last quarter report as opposed to the minimum four
quarterly meetings as per the gazette notice. It was further noted that the position of
chairperson of the Audit Committee became vacant due to natural attrition, however the
committee did not appoint an acting chairperson to the Audit Committee and the County
Assembly had not appointed a chairperson by the time of audit. Further, it was noted that
one member of the Audit Committee appointed on 9 November, 2020 for a period 3 years
was a spouse of the head of ICT. However, the Audit Committee member did not declare
conflict of interest as required by the gazette notice.
In the circumstances, it was not possible to confirm whether the audit committee was
effective during the year under review.
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COUNTY ASSEMBLY OF TURKANA – NO.23
228. Unsupported Compensation of Employees
The statement of receipts and payments for the year ended 30 June, 2023 reflects
compensation of employees amount of Kshs.468,454,468 (2022: Kshs.619,723,205) as
disclosed in Note 4 to the financial statements. However, included in the amount of
Kshs.468,454,632 was an amount of Kshs.62,375,359 which was not supported by the
payroll.
In the circumstance, the accuracy and completeness of the unsupported expenditure on

compensation of employees of Kshs.62,375,359 could not be confirmed.
229. Inaccuracies in the Non-Current Assets
As previously reported, the summary of non-current assets register at Annex 4 to the

financial statements reflects a balance of Kshs.1,598,953,511 (2021/2022
Kshs.1,526,017,594) which did not include the undetermined value of land and buildings
inherited by the County Assembly from the defunct Municipal Council of Turkana. In
addition, the County Assembly had not maintained fixed assets' register in the required
format and manner. The assets register provided for audit did not have a record of fixed
assets such as land, buildings and motor vehicles and did not have information such as
the acquisition costs, opening balances at the start of the year, disposals and the closing
balances at the end of the year, with others missing serial numbers, models and makes.
Further, there was no evidence that the County Assembly carried out annual physical
verification of the assets, matching the recorded assets with physical existence and
condition. The management had also not tagged/branded its assets as required under
Regulations, 2015.
In the circumstances, valuation, accuracy and completeness of the non-current assets

balance of Kshs.1,598,953,511 could not be confirmed.
230. Inaccuracies of Imprests and Advances
The statement of financial assets and liabilities reflects imprest and advances balance of
Kshs.10,835,245 as at 30 June, 2023. However, review of imprest records provided
revealed other imprests of Kshs.8,373,500 outstanding in 2020/2021 was not included in
the imprest register and the financial statements.
In the circumstances, the accuracy and completeness of imprests and advances balance
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231. Unsupported Legal Expenses
Review of IFMIS payment details revealed that three (3) firms were paid legal expenses
amounting Kshs.27,357,135. However, the payments were not supported with user
requisitions, evidence of competitive bidding from the list of prequalified legal firms,
professional opinions from the head of procurement unit, notification of awards and
acceptance letters, the itemized instructions made to the lawyers on the services
required, copies of judgement summaries where applicable, and certificates of costs on
which the legal fee notes were based. In addition, there was no opinion and letter of no
objection for engagement of private legal firms by either the designated principal legal
advisor to the County Assembly or the county attorney who is indicated in the annual
report and financial statements as the principal legal advisor.
In the circumstances, the occurrence and propriety of the legal expenses of

Emphasis of Matter
232. Undisclosed Pending Bills
The pending bills as disclosed in other disclosures (1) reflects an amount of

Kshs.95,064,065 which comprised of construction of buildings of Kshs.15,021,665 and
supply of goods of Kshs.80,042,400. However, the analysis in annex 1 to the financial
statements did not include details of the date of invoice/contract, description of the
particulars and movement in the pending balances as required by the reporting standards.
Further, review of records maintained by Kenya Revenue Authority indicated that the
County Assembly had outstanding taxes amounting Kshs.486,172,760 which had not
been disclosed or included in the pending bills.
Failure to settle the bills during the year they relate to distorts the financial statement and
adversely affects the budgeting provisions for the subsequent year as they form a first
charge.
Other Matter
233. Failure to Submit/Resolve Prior Year Audit Matters
Recommendations from the oversight legislative committees on the issues raised in the
audit report for 2021/2022 and previous financial years were not submitted for audit
verification hence the audit could not confirm whether the audit reports were discussed
and recommendations implemented. This was contrary to Section 149(2)(l) of the Public
Finance Management Act, 2012 which requires accounting officers designated for county
government entities to try to resolve any issues resulting from an audit that remain
outstanding.
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RESOURCES
234. Regularity of Imprest Management
Review of records revealed outstanding imprests amounting Kshs.19,208,745. Out of this

amount, imprests amounting Kshs.8,373,500 related to 2021/2022 while outstanding
imprests of Kshs.10,835,245 were issued during the year under review. The imprests had
not been surrendered by the time of audit in September, 2023 contrary to Regulation 93
of the Public Finance Management (County Governments) Regulations, 2015 which
requires a holder of a temporary imprest to account or surrender the imprest within seven
(7) working days after returning to duty station failure to which the Accounting Officer shall
take immediate action to recover the full amount from the salary of the defaulting officer
with an interest at the prevailing Central Bank Rate.
Further, review of records revealed that nine (9) members of staff of the County Assembly
were issued with multiple imprests amounting to Kshs.4,716,900 before surrender of the
previous imprests. This was contrary to Regulation 93(8) of the Public Finance
Management (County Governments) Regulations, 2015.
In the circumstances, Management was in breach of law.
235. Irregularities in Purchase of Document Management System
The County Assembly procured a document management system from a vendor at a cost
of Kshs.7,957,601 during the year under review. The system was delivered and was in
use at the time of audit in August, 2023. However, there was no evidence of contract or
agreement between the County Assembly and the vendor stipulating the system
specifications and terms of engagement. Further, inspection and acceptance report and
warranty for the system were not provided for audit review. This was contrary to Section
48(1) of the Public Procurement and Assets Disposal Act, 2015 which stipulates that an
Accounting Officer may appoint an Inspection and Acceptance Committee and Section
48(4) which requires that committee to ensure that all required manuals and
documentation has been received.
236. Delayed Completion of Projects and Non-Recovery of Liquidated Damages

from Contractors
Management awarded contracts to five (5) contractors to undertake construction projects

namely; Proposed Construction of Library Block; Construction of Speaker's Guest House,
Home Office and Garage; Completion of Speaker's residence; County Assembly Annex
Building and Refurbishment of Former Survey Offices and Proposed Administration Block
between June, 2016 and July, 2022 at a total contract sum of Kshs.272,726,159 with
various commencement and completion dates. However, at the time of audit in August,
2023, the project status of work done was estimated to be between 30% and 90% and
95
the five projects were on-going. However, review of the project files revealed that the
contract period for all the projects had elapsed for between one (1) and fifty (50) months
and no extension had been requested by the contractors.
Further, the contract agreements provided that if a contractor failed to complete the works
by the date for practical completion or such extended time, he/she shall pay the employer
liquidated damages for the period during which the works shall remain or have remained
incomplete. However, the County Assembly had not recovered any liquidated damages
accrued from the contractors as at the time of audit in August, 2023.
In addition, the County Assembly contracted a private consultant as the project manager
for the five projects. However, the signed contract with the projects’ consultant (Project
Manager) for Proposed Construction of Speaker's Guest House, Home Office and
Garage was not provided for audit verification. This was contrary to Section 135(1) of the
Public Procurement and Asset Disposal Act, 2015 which states that the existence of a
contract shall be confirmed through the signature of a contract document incorporating
all agreements between the parties and such contract shall be signed by the accounting
officer or an officer authorized in writing by the accounting officer of the procuring entity
and the successful tenderer. In addition, the County Assembly had not appointed a project
implementation team to oversight each of the five projects and ensure implementation of
contracts was in accordance with the terms and conditions of the contracts and a clerk of
works to help in project supervision.
In the circumstances, Management was in breach of the law and value for money derived
from the expenditure on the delayed projects could not be confirmed.
237. Irregularities in the Construction of Speaker’s Residence
The County Assembly entered into a contract for construction of the Speaker’s residence
on 11 July, 2016 at an unclear contract sum indicated as “Kshs.75,016,755,63.9/= in
figures and seventy million and sixteen thousand, seven hundred and fifty-five hundred
and sixty-eight shillings” in words. No clarification or corrective documentation was
provided to confirm the actual contract sum. The works were to commence on 11 August,
2016 and complete on 11 August, 2019. The contract period lapsed after the contractor
had been paid an undetermined amount of money and a new contract was entered into
for completion of the residence at a contract sum of Kshs.29,910,000. Another contract
for Proposed Construction of Speaker's Guest House, Home Office and Garage was also
entered into a contract sum of Kshs.19,930,500.
The contract cost for the two projects at the Speakers residence was therefore
cumulatively above the authorized limit of Kshs.35 million provided for by the Salaries
and Remuneration Commission.
In the circumstances, the regulating of the expenditure of Kshs.19,930,500 in respect of

the Speaker’s residence could not be confirmed.
96
238. Projects Implementation Status
During the audit in August to September, 2023, six (6) projects with total contract sum of
Kshs.494,994,127 were inspected. One (1) project with a contract sum of
Kshs.222,267,968 was found to be complete but not in use and five (5) projects with a
total contract sum of Kshs.272,726,159 were partially done.
In the circumstances, there was no value for money derived from the idle and incomplete
projects.
239. Regularity of Human Resource Management Practices
239.1 Lack of Approved Staff Establishment
The County Assembly recruited sixteen (16) new staff without an approved staff
establishment to guide on the number and cadres of staff authorized that could have
resulted in over-employment or filling of positions not necessary thus increasing
expenditure on personnel emoluments. Management has not explained the basis of the
recruitment contrary to Section B. 5 (2) of the County Public Service Human Resource
Manual, 2013 which requires that all vacancies must be declared in a prescribed format
which must include: the number of vacancies; when the vacancy occurred; whether the
vacancy is within the authorized establishment and other relevant details.
239.2 Non-Compliance with the Law on Ethnic and Regional Distribution
Analysis of the Integrated Personnel and Payroll Database (IPPD) and other human
resource records verification revealed that 96.4% of the County Assembly staff are from
one dominant community contrary to Section 7(1) and (2) of the National Cohesion and
Integration Act, 2008 which requires that all public establishments shall seek to represent
the diversity of the people of Kenya in the employment of staff and no public establishment
shall have more than one third of its staff from the same ethnic community. Further, out
of the sixteen (16) new staff recruited during the year, fifteen (15) or 94% were from the
dominant ethnic community.
239.3 Non-Adherence to One Third Basic Salary Rule
Review of Integrated Personnel and Payroll Database (IPPD) payroll provided revealed
that in the months of July, 2022, January, 2023 and June, 2023, seven (7), five (5) and
four (4) officers respectively were drawing net salary of less than a third of their respective
basic salaries in contravention of Section 19(3) of the Employment Act, 2007 which states
that deductions made by an employer from the wages of his employee at any one time
shall not exceed two-thirds.
239.4 Non-Compliance with Fiscal Responsibility Principle on Wage Bill
The statement of receipts and payments reflects an expenditure of Kshs.468,454,468 on

compensation of employees which represents 46% of the total receipts of
Kshs.1,019,841,530. This was contrary to the provisions of Regulation 25(i)(a) of the
97
Public Finance Management (County Governments) Regulations, 2015 which provides
that expenditure on wages and benefits should not exceed 35% of the total revenue.

240. Failure to Constitute Audit Committee
The County Assembly of Turkana was yet to constitute an audit committee as at

30 June, 2023, contrary to the provisions of Regulation 167(1) and (2) of the Public
Finance Management (County Governments) Regulations, 2015 which requires every
County Government entity to establish an audit committee. As a result, the County
Assembly did not benefit from the assurance and advisory services of the Audit
Committee.
In the circumstances, the effectiveness of internal controls could not be confirmed.
241. Weak Internal Audit Function
The County Assembly has an internal audit function for reviewing the governance
mechanisms and operations of the County Assembly for transparency and accountability
with regard to the finances and assets of the entity as required by Section 155 of the
Public Finance Management Act, 2012. However, there were no internal audit reports on
the state of risk management, control and governance within the County Assembly and
there was no approved internal audit workplan for the year.
In the circumstances, the existence of an effective internal control and governance could
not be confirmed.
The County Assembly has not developed a risk management policy and risk assessments
were not performed for the year ended 30 June, 2023 contrary to Regulation 158(1) and
163(1) of the Public Finance Management (County Governments) Regulations, 2015
which requires each county government entity to develop risk management strategies
and a system of risk management.
In the circumstance, there was no assurance over risk management and governance in
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COUNTY ASSEMBLY OF WEST POKOT – NO.24

243. Unreconciled Variance Between the Payroll and Financial Statement
Amounts
The statement of receipts and payments reflects compensation of employees of

Kshs.305,815,877 (2022: Kshs.346,626,218) as disclosed in Note 2 to the financial
statements. However, the amount differed with the gross payroll amount of
Kshs.266,341,917 resulting in unexplained variances as analyzed below:
Financial
Statement IPPD Payroll
Amount Amount Variance
Description (Kshs.) (Kshs.) (Kshs.)
Basic salaries of permanent 241,516,417 103,680,948 137,835,469
employees
Basic wages of temporary 18,041,034 15,283,104 2,757,930
employees
Personal allowances paid as 13,712,328 133,887,974 (120,175,646)
part of salary - Sittings (MCA
and CASB)
Pension and other social 0 13,489,892 (13,489,892)
security contributions
Other personnel payments 32,546,098 0 32,546,098
305,815,877 266,341,918
In the circumstances, the accuracy and completeness of the compensation of employees

of Kshs.305,815,877, could not be confirmed.
244. Unsupported Acquisition of Assets
The statement of receipts and payments reflects acquisition of assets of Kshs.47,535,130

as disclosed in Note 7 to the financial statements. However, supporting schedules for
payments amounting to Kshs.40,089,130 was not availed for audit verification.
In the circumstances, the accuracy and completeness of acquisition of assets amounting

to Kshs.40,089,130 could not confirmed.
245. Unconfirmed Cash and Cash Equivalents
The statement of financial assets and liabilities reflects cash and cash equivalents of
Kshs.40,675,951 comprising of deposits and retention account as indicated in Note 8A to
the financial statements. However, the bank account number, bank statement and bank
99
reconciliation statements were not provided for audit. Further, the statement of cashflow
indicates that the cash and cash equivalents as at the end of the year was nil resulting to
unexplained variance of Kshs.40,675,951. In addition, the same amount was omitted as
a balance in the net financial position to the statement of financial assets and liabilities.
In the circumstances, the accuracy and completeness of the cash and cash equivalents
Emphasis of Matter
246. Pending Bills
Annex 1 to the financial statements reflects pending accounts payable of

Kshs.48,635,092 out of which Kshs.1,664,332 is in respect of the financial period
2021/2022 and earlier years. These bills ought to have been paid as a first charge on the
budget of the County Assembly in the proceeding years. In addition, a review of the
pending bills details provided for audit revealed that pending bills amounting to
Kshs.15,805,505 were not supported by the appropriate authority and documentation.
RESOURCES
247. Unsupported Staff Recruitments
Review of the Integrated Personnel and Payroll Database (IPPD’s) compliment data
revealed that the County recruitment of one hundred and forty-two (142) additional
members of staff during the year. However, the recruitment was not supported with any
evidence of declaration of all vacant posts in the prescribed format as provided in Section
B.5(1) and (2) of the County Assembly Human Resource Manual, 2015, that on reporting
of vacancies, an authorized officer must declare all vacant posts to the County Assembly
Service Board in a prescribed format which shall include: the number of vacancies; when
the vacancy occurred; whether the vacancy is within the authorized establishment and
other relevant details. Further, the County Assembly had no operational staff
establishment instrument to support the recruitment.
248. Issuance of Multiple Imprest
Examination of imprest warrants and analysis of payment details revealed that the seven
(7) staff were issued with multiple imprests contrary to contrary to Section 93(8) of the
Public Finance Management (County Governments) Regulations, 2015 which requires
that an accounting officer or AIE Holder shall ensure that no second imprest is issued to
any officer before the first imprest is surrendered or recovered in full from his or her salary.
100
249. Non-Compliance with one Third Ethnic Composition
Review of the Integrated Personnel and Payroll Database data for the financial year
revealed that out of 374 employees, 351 are from the dominant ethnic community making
approximately 94% of the staff. This was contrary to Section 7(2) of the National Cohesion
and Integration Act, 2008, which stipulates that no public establishment shall have more
than one third of its staff from the same ethnic community
Review of payroll bank remittance reports and Internet Banking (IB) statements in respect
of statutory deductions revealed instances of late remittance of PAYE and NHIF
deductions as analyzed below:
Amount
S/NO Particulars (Kshs.) Date Deposited
1 PAYE for July, 2022 4,285,235 07 Sept, 2022
2 PAYE for September, 2022 2,126,220 24 Oct, 2022
3 PAYE for October, 2022 4,109,481 16 Nov, 2022
4 NHIF for July, 2022 283,250 02 Sept, 2022
5 NHIF for Sept, 2022 155,950 24 Oct, 2022
6 NHIF for Oct, 2022 196,300 16 Nov, 2022
7 NHIF for Feb, 2023 205,000 13 March, 2023
8 NHIF for May, 2023 389,050 12 Jun, 2023
Part III of Employer’s guide to PAYE in Kenya, 2017 provides that remittance of the PAYE
tax should be on or before the ninth day of the following month whereas Section 16 (3)
(a) of the National Hospital Insurance Fund Act, 1998 requires remittance of deductions
within one month of the deduction.
251. Irregular Legal Expenses
The County Assembly incurred an amount of Kshs.16,827,587 in respect of legal fees

which were pending bills. The pending bills arose from prior years’ engagements in five
(5) litigations with an aggregated fee note demands of Kshs.32,000,000.
However, the following audit issues were noted:
i) Legal fees for each of the five (5) cases were charged at rates ranging between
Kshs.5,000,000 to Kshs.8,000,000. However, there was no evidence that the
legal fees were arrived at as per the Advocates Remuneration (amendment)
Order, 2014.
101
ii) The Management opted to outsource legal presentation when it had a fully-
fledged legal function with a team of two competent legal practitioners.
iii) Cases referenced: Eldoret ELRC Petition No. 21 of 2020 and Eldoret ELRC
Petition No. 23 of 2020 with fee notes valued at Kshs.7,000,000 each were filed
at the labour relations court challenging the County Assembly Public Service
Board specific decisions on human resource management which were made
without seeking the opinion of the County Assembly’s legal officers.
In the circumstances, the propriety and value for money of the expenditure on legal could
not be confirmed.

252. Weak Information Technology Internal Control Environment
Review of the Information Technology Internal Controls revealed that Management had
not developed an IT continuity and disaster recovery plan which would be resorted to in
case of disruption of service. Besides, the County Assembly did not have an approved IT
strategic committee and strategic plan which is important in performing the oversight
function and formulation of policies to ensure that the IT investments and functions are
directed towards achievement of the mandate of the County Assembly.
In the circumstances, the reliability and effectiveness of the County Assembly’s
Information Technology internal controls could not be confirmed.
253. Lack of Occupational Safety and Health Policy
The County Assembly did not have an approved Occupational Safety and Health Policy,
an Occupational Safety and Health Committee at the workplace contrary to Section 9(1)
of the Occupational Safety and Health Act, 2007 which requires every occupier to
establish a safety committee at the workplace in accordance with regulations prescribed
by the Minister and also Section 11(1) that states that the occupier of a workplace shall
cause a thorough safety and health audit of his workplace to be carried out at least once
in every period of twelve months by a safety and health advisor.
In the circumstances, the effectiveness of the occupational safety and health procedures
put in place by the County Assembly staff could not be confirmed.
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COUNTY ASSEMBLY OF SAMBURU – NO.25
254. Unconfirmed Transfers to Other Government Entities
The statement of receipts and payments reflects transfers to other Government entities
amount of Kshs.18,800,000 which, as disclosed in Note 7 to the financial statements
relates to transfers to Car Loan Scheme Fund. However, the financial statements of
Samburu County Assembly Mortgage and Car Loan Scheme Fund did not reflect the
receipts of the Kshs.18,800,000 from the County Assembly.
In the circumstance, the accuracy and completeness of the transfers to other Government
entities of Kshs.18,800,000 could not be confirmed.
255. Misclassified Expenditure

However, analysis of expenditure records revealed misclassified expenditure amounting
to Kshs.20,218,801 as shown in the table below:
Amount
Account Charged Correct Account Kshs.
Personal allowances paid as Part Domestic Travel and 13,329,964
of Salary Subsistence
Motor Vehicle repairs and Rentals of Produced 1,082,490
maintenance Assets
Motor Vehicle repairs and Purchase of Office 254,880
maintenance Furniture and General
Equipment
Motor Vehicle repairs and 506,707
General Withholding Tax
maintenance
Motor Vehicle repairs and 796,400
Fuel, oil and Lubricants
maintenance
Motor Vehicle repairs and Communication, Supplies 287,500
maintenance and Services
Refurbishment of Buildings Purchase of Office 612,740
Furniture and General
Equipment
Foreign travel Other operating expenses 56,920
Foreign travel Domestic Travel and 2,929,870
Subsistence
Foreign travel Specialized supplies and 126,330
services
Office Furniture Domestic Travel and 165,000
Subsistence
103
Amount
Account Charged Correct Account Kshs.
Specialized Plant Office and General 27,000
Supplies and Services
Specialized Plant Domestic Travel and 43,000
Subsistence
Total 20,218,801
In the circumstances, the accuracy and completeness of payments amounting to

256. Inaccuracies in the Statement of Cash Flows
The statement of cash flows reflects Nil balance under increase /(decrease) in accounts
payables while Note 19 reflects a decrease in third party deposits and retentions amount
of Kshs.24,087,216.
In the circumstances, the accuracy of the statement of cash flows could not be confirmed.
257. Inaccuracies in Non-Current Assets
Annexure 4 to the financial statements reflects summary of non-current assets balance

of Kshs.741,933,723. However, the asset register reflects a balance of Kshs.475,489,601
resulting to unexplained variance of Kshs.266,444,122. Further, assets acquired during
the year amounting Kshs.6,165,160 were not included in the asset register.
In the circumstances, the accuracy and completeness of the non-current assets balance
of Ksh.741,933,723 could not be confirmed.
258. Unsupported Bank Balances and Deposits
Note 13A to the financial statements reflects bank balances of Kshs.47,714. However,
bank reconciliation statements and cashbooks were not provided for audit review.
Further, the statement of assets and liabilities as disclosed in Note 15 to the financial
statements reflects third party deposits and retentions balance of Kshs.12,886,034.
However, no records of outstanding deposits and retentions payable and aging analysis
were provided for audit review.
In the circumstances, the accuracy and completeness of third-party deposits and
retention balance of Kshs.47,714 and Kshs.12,886,034 respectively could not be
confirmed.
Note 5 to the financial statements reflects use of goods and services expenditure of
Kshs.219,017,609 out of which an amount of Kshs.13, 800,000 was spent on foreign
travel. Included in this component is an imprest of Kshs.1, 524,028 paid to two officers
for training in Dubai which was not supported by travel and training documents.
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In the circumstances, the accuracy and completeness of foreign travel expenditure
Other Matter
In the report of the previous year, several issues were raised under Report on
Resources and Report on Effectiveness of Internal Controls, Risk management and
Governance. However, the Management had not resolved the issues or given any
explanations for failure to implement the recommendations.
REPORT ON LAWFULESS AND EFFECTIVENESS IN USE OF PUBLIC RESOURCES
261. Non-Compliance with the One-Third Rule on Salary
Review of payroll records revealed that thirteen (13) employees earned a net salary of
less than a third (1/3) of the basic salary. This was contrary to Section 19(3) of the
Employment Act, 2007, which states that the total amount of deduction of the wages of
an employee shall not exceed two- thirds (2/3) of such wages.
ln the circumstances, Management was in breach of the law.

262. Overpayment of Benefits
Review of County Assembly Service Board (CASB) records revealed that two officers
drew extra benefits of Kshs.20,000 each for the months of January, 2023 to June, 2023
totalling Kshs.240,000. This was contrary to Salaries and Remuneration Commission
(SRC) Circular Ref: No. SRC/TS/CGORT/3/6/VOL.IV (49) which recommends the
remuneration package.
In the circumstances, value for money on extra benefits of Kshs.240,000 paid to County
Assembly Service Board officers could not be confirmed.
263. Non-Compliance with Law on Staff Ethnic Composition
As previously reported, the total number of employees of the County Assembly were
seventy-four (74) out of whom sixty-three (63) or 85 % of the total number were members
of the dominant ethnic community in the county. This was contrary to Section 7(1) and (2)
of the National Cohesion and Integration Act, 2008 which states that, “all public offices
shall seek to represent the diversity of the people of Kenya in employment of staff and
that no public institution shall have more than one third of its staff establishment from the
same ethnic community”.
ln the circumstances, Management was in breach of the law.
105
264. Unauthorized Payments of Subscription Fees
Note 5 to the financial statements reflects other operating expenses of Kshs.19,606,695

which includes Kshs.750,000 paid to Society of Clerks -At-The Table (SOCATT) and
Kshs.5,139,655 paid to County Assembles Forum (CAF) as annual subscription fees.
However, these bodies do not draw their mandate from the Constitution Kenya, 2010 or
an Act of Parliament and the payments were not factored in the 2022/2023 approved
budget.
This was contrary to Regulation 105(1) of the Public Finance Management (County
Governments) Regulation, 2015 which states that an Accounting Officer may authorize
payment vouchers provided such expenditure is in respect of and within the provision of
the services in a County Treasury warrant and in accordance with the law and regulations.
265. Unauthorized Over Expenditure on Construction of the Speakers Residence
The Management entered into a contract for construction of the Speakers’ residence on
14 January, 2022 at a contract sum of Kshs.33,934,103 which was varied to
Kshs.42,385,323. This resulted to the contract sum exceeding the Kshs.35,000,000
ceiling set by the Salaries and Remuneration Commission through circular referenced
SRC/TS/COG/6/61/48 VOL.II (64) of 20 May 2019 by an amount of Kshs.7,385,323.
As at 13 April, 2023, an amount of Ksh.41,685,322.6 had been paid to the contractor for
the works. However, documents to confirm the approval of the over expenditure on
Speakers residence by the Senate were not provided for audit. Further, the deadline of
30 June, 2022 for the completion of the residence had lapsed.

266. Understaffing of Internal Audit Department
The organization structure provided for the position of an internal auditor and an assistant
internal auditor but the department had only one member of staff, an assistant internal
auditor.
In the circumstances, the effectiveness of review and evaluation of internal controls, risk
management and overall governance could not be confirmed.
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COUNTY ASSEMBLY OF TRANS NZOIA – NO.26

Unqualified Opinion
Emphasis of Matter
268. Pending Bills
Annex 1 Other Disclosure reflects pending accounts payables of Kshs.468,550; other

pending payables of Kshs.29,330,247 and pending staff payables of Kshs.5,626,288
account totalling Kshs.35,425,085. However, records maintained by Kenya Revenue
Authority (KRA) revealed outstanding taxes amounting to Kshs.216,548,161 while the
County Assembly disclosed only Kshs.9,942,363 as the pending bill to KRA. Further,
pending bills amounting to Kshs.13,659,861 relating to financial years 2021/2022 and
earlier years had not been settled. No reasons were provided for failure to treat the
amounts as a first charge on the proceeding budgets as required by law.

RESOURCES
269. Unsupported Legal Expenses
The expenditure on use of goods and services includes legal expenses amounting to
Kshs.1,041,000 paid to three (3) legal firms. However, the amount was not supported by
user requisitions, evidence of competitive bidding from prequalified legal firms,
professional opinions from the head of procurement unit, notification of awards and
acceptance letters, the itemized instructions made to the lawyers on the services
required, copies of judgements summaries, and certificates of costs on which the legal
fee notes were based. Further, there was no opinion and letter of no objection for
engagement of private legal firms by either the County Attorney or the designated
principal legal advisor to the County Assembly.
In the circumstances, the regularity of the expenditure on legal services of

270. Irregular Subscription Fees
of Kshs.343,735, 356 as disclosed in Note 3 to the financial statements. Included in this
expenditure is other operating expenses of Kshs.20,847,294 out of which Kshs.800,000
107
was paid to Society of Clerks and County Assemblies Forum. However, the basis of the
payments was not stated and supported by the enabling legislation that created the
Society of Clerks and County Assemblies Forum for them to receive public funds. This
contravenes Section 149(1)(a) of the Public Finance Management Act, 2012 which
provides that an accounting officer is accountable to the County Assembly for ensuring
that the resources of the entity for which the officer is designated are used in a way that
is lawful and authorised.
271. Proposed Construction of Administration Building and Assembly Chambers
The County Assembly engaged a contractor for the proposed construction of

Administration Building and County Assembly Chambers at a contract sum of
Kshs.477,657,860. The contract was signed on 18 January, 2021 for a contract period of
eighteen (18) months. The following unsatisfactory matters were noted:
271.1 Irregular Termination of Contract
The contractor requested for an extension of time on 7 June, 2022 for execution of works
from 28 July, 2022 to 30 May, 2023 after carrying out works valued at Kshs.39,231,347.
However, the request was declined by the County Assembly on 15 June, 2022 citing lack
of execution of work for six (6) months up to June, 2022 and lack of capacity. The contract
was subsequently terminated on 22 July, 2022 where the final account for contract
termination was drawn and signed by all parties responsible.
However, termination of the contract was not supported with a request for approval to
terminate the contract from the procurement department to the accounting officer and
subsequent approval by the accounting officer clearly stating the reasons for termination,
the contractual grounds for termination and the cost of terminating the contract, contract
document specifying the grounds on which the contract was terminated and specifying
the procedures applicable on termination and evidence that the County Assembly sought
legal advice or clearance from the County Attorney or such person designated in writing
before terminating a contract. This was contrary to Regulation 141 of the Public
Procurement and Disposal Regulations, 2020.
271.2 Irregular Contract Management
After the contract was terminated, the County Assembly retendered the works at a cost
of Kshs.464,359,150 for thirty-seven (37) weeks from 20 March, 2023 resulting to
combined contract sum of Kshs.503,590,497 that included Kshs.39,231,347 incurred on
the initial contract, resulting to avoidable cost escalation of Kshs.25,932,637.
Further, the private consultant for the project was retained without clear terms on how
they were to be remunerated given the extended project period. Further, no justification
was provided for the use of a consultant to design and supervise the project instead of
the County Public Works Department or the State Department for Public Works. The
108
consultants had been engaged since 2018 for which they were paid Kshs.22,553,399
during the year under review.
In the circumstances, timely completion of the project is uncertain and to value for money
obtained from resources utilized in this project could not be confirmed.
272. Human Resource Management

272.1 Lack of Approved Staff Establishment
During the year under review, the County Assembly did not have an approved staff
establishment in place to guide on the number of staff and the cadres authorized. It was
therefore not clear the basis on which recruitments were made contrary to Section B. 5
(2) of the County Public Service Human Resource Manual, 2013 which requires that all
vacancies must be declared in a prescribed format which must include: the number of
vacancies; when the vacancy occurred; whether the vacancy is within the authorized
establishment and other relevant details.
272.2 Variances Between Staff Establishment and Actual Number of Employees
Review of the Integrated Personnel and Payroll Database (IPPD) staff generated staff
establishment revealed excess staff in posts from the authorized positions as detailed
below;
Pay Authorized In- Variance/Over-

Group Code Description Posts Posts Establishment
BA C01AN Principal 1 2 1
Administration Officer
BA D02EK Statistical Officer [2] 0 1 1
BA E01BR Deputy Chief State 0 1 1
Counsel
BA U01AK Principal Driver 0 1 1
272.3 Non-Compliance with Ethnic and Regional Distribution
Review of payroll and human resource records revealed that the County Assembly has
fifty-two (52%) of its employees from the one dominant community in the County. This
was contrary to Section 7(1) and (2) of the National Cohesion and Integration Act, 2008
which provides that all public establishments shall seek to represent the diversity of the
people of Kenya in the employment of staff and no public establishment shall have more
than one third of its staff from the same ethnic community.
272.4 Non-Adherence to One Third Basic Salary Requirement
Review of the Integrated Personnel Payroll Database (IPPD) revealed that thirteen (13)
members of staff were drawing net salaries of less than a third of their basic salary. This
was contrary to Section C.1(3) of Human Resource Policies and Procedures Manual for
the Public Service (2016), which provides that public officers shall not over commit their
salaries beyond two thirds (2/3) of basic salary.
109

273. Unconfirmed Assets Inherited from Defunct Municipal Council
Annex 3 to the financial statements under other important disclosures reflects summary
of non-current asset register historical cost of Kshs.388,949,701. However, this balance
excludes the value of land and buildings inherited from the defunct Municipal Council for
which no handover was done indicating the assets, their values, ownership status and
use. Further, the summary of fixed assets register was not supported by an updated fixed
asset register to show category of assets and the historical cost breakdown.
In the circumstances, the existence, valuation, ownership and effectiveness in use of the
assets inherited from the defunct local authorities could not be confirmed.
274. Ineffective Internal Audit Function
Although the County Assembly has an internal audit unit, there was no evidence in form
of a report to confirm that, the unit reviewed and evaluated budgetary performance,
financial management, non-financial performance, risk management and processes in
Further, review of the risk management records revealed that the County Assembly had
not developed a Risk Management Policy and no risk assessment was performed during
the year.
In the circumstances, the effectiveness of internal controls and risk management could
not be confirmed.
275. Staff Members Sharing Bank Account Numbers
Review of payroll for the year under review revealed that, seventy-seven (77) members
of staff shared the same Sacco account number which was not a joint account.
In the circumstances, the regularity of salary payments into the shared account could not
be confirmed.
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COUNTY ASSEMBLY OF UASIN GISHU – NO.27

276. Variance Between Financial Statements and IFMIS Reports
The statement of receipts and payments reflects balances which significantly differed with
the balances from the Integrated Financial Management Information System (IFMIS)
ledger as detailed below:
Financial
Statements Amounts in
Amounts IFMIS Reports Variance
Receipts (Kshs.) (Kshs.) (Kshs.)
Transfers from the County 942,000,494 - 942,000,494
Treasury/Exchequer Releases
Payments
Compensation of Employees 339,925,460 338,689,156 1,236,305
Use of Goods and Services 322,037,098 340,373,568 (18,336,470)
Social Security Benefits 36,000,000 2,869,415 33,130,585
Finance Costs 55,000 - 55,000
Finance Costs, including Loan - 5,000 (5,000)
Interest
Other Payments 200,000,000 - 200,000,000
No explanation was provided by Management for the variances between the two sets of
records.
In the circumstances, the accuracy and completeness of the respective balances in the
statement of receipts and payments could not be confirmed.
use of goods and services balance of Kshs.322,037,098 which includes training expenses
amount of Kshs.34,860,000 . However, review of payment vouchers and supporting
documentation provided revealed that an amount of Kshs.3,528,322 was not supported
with sufficient surrender documents such as training needs assessments, approvals for
the trainings, attendance registers and certificates. Further, temporary imprests were paid
into the officers’ personal bank accounts but the imprest warrants were not signed by the
imprest holders to acknowledge receipt of the imprests and some were paid to merchants.
This was contrary to Regulation 104(1) of the Public Finance Management (County
Governments) Regulations, 2015, which states that all receipts and payments of public
111
moneys shall be properly supported by pre-numbered receipt and payment vouchers and
shall be supported by the appropriate authority and documentation.
In the circumstances, the accuracy and completeness of training expenses amount of

Emphasis of Matter
and actual on a comparable basis of Kshs.1,214,536,574 and Kshs.942,000,494
respectively resulting to an under-funding of Kshs.272,536,080 or 22% of the budget.
Similarly, the County Assembly expended Kshs.941,994,275 against an approved budget
of Kshs.1,214,536,574 resulting to an under-expenditure of Kshs.272,542,299 or 22% of
the budget.
The underfunding and underperformance affected the planned activities and have
279. Pending Accounts Payables
Note 1 of other important disclosures to the financial statements reflects pending

accounts payable balance of Kshs.36,547,608 which includes balances of
Kshs.10,541,529 and Kshs.26,006,079 in respect of balances brought forward and
additions for the year respectively. Failure to settle pending bills during the year in which
they relate distorts the financial statements and adversely affects the budgetary
provisions for the subsequent year as they form a first charge.
Other Matter
Governance. However, the Management had not resolved the issues nor given any
explanation for failure to implement the recommendations.

RESOURCES
281. Non-Compliance with Law on One-Third of Basic Salary Rule
Review of the payroll for the year under review revealed that thirty-five (35) employees
earned a net salary of less than a third of the basic pay contrary to Section 19(3) of the
112
employment Act, 2007 which states that without prejudice to any right of recovery of any
debt due, and notwithstanding the provisions of any other written law, the total amount of
all deductions which under the provisions of Subsection (1), may be made by an employer
from the wages of his employee at any one time shall not exceed two-thirds of such
wages.
282. Failure to Submit Financial Statements for the County Assembly Service
Board
The County Assembly Board did not submit its financial statements for the year under
review to the Auditor-General. As previously reported, the Board has not prepared nor
submitted its financial statements since its inception for audit contrary to Section 32(2)(a)
of the County Assembly Services Act, 2017 which states that within three months after
the end of each financial year, the Secretary shall submit to the Auditor- General the
accounts of the Board for the year with copies to the County Treasury, Controller of
Budget and Commission on Revenue Allocation.
283. Non-Compliance with the Law on Ethnic Diversity
Review of personnel records for the year under review indicated that the County
Assembly had two hundred and thirty-eight (238) members of staff as at 30 June, 2023,
out whom two hundred and eighteen (218) or approximately 92% were from the dominant
ethnic community in the County. In addition, the County Assembly Service Board (CASB)
recruited a total of thirteen (13) employees all of whom are from one dominant community
contrary to contrary to Section 65(1)(e) of the County Governments Act, 2012 which
states that in selecting candidates for appointment, the County Public Service Board shall
consider the need to ensure that at least thirty (30) percent of the vacant posts at entry
level are filled by candidates who are not from the dominant ethnic community in the
county.
284. Payment of Salary Outside Integrated Personnel and Payroll Database (IPPD)
The statement of receipts and payments reflects compensation of employees’ a balance

of Kshs.339,925,460 which include an amount of Kshs.88,768,428 paid to three Members
of County Assembly (MCAs), forty-four (44) personal assistants to the MCAs, ninety (90)
liaison officers based in ward offices and four (4) office assistants to the Speaker of the
County Assembly outside IPPD. No explanation has been provided for the processing of
the wages outside the IPPD system. This was contrary to Section 1.5.1 of the Treasury
Guidelines through the Financial Accounting Recording and Reporting manual which
requires that each county government department is responsible for populating the IPPD
with the information contained in these documents, issuing each appointee with a unique
payroll number from the system, and providing the appointee with a letter of appointment.
113
In the circumstances, Management was in breach of the law

AND GOVERNANCE
285. Failure to Establish an Audit Committee
The County Assembly did not have in place an Audit Committee to oversight the
operations during the year contrary to Regulation 167(1) of the Public Finance
Management (County Governments) Regulations, 2015 which provides for the
establishment of an Audit Committee. This also affects the independence of the Internal
Audit function as provided for under Regulation 155(1) of the Public Finance Management
(County Governments) Regulations, 2015 which states that the Head of Internal Audit
Unit in a County Government entity shall enjoy operational independence through the
reporting structure by reporting administratively to the Accounting Officer and functionally
to the Audit Committee.
In the circumstances, existence of good governance in the County Assembly could not
be confirmed.
During the period under review, Management did not have in place a risk Management
policy contrary to Regulation 158(1)(a) and (b) of the Public Finance Management
(County Governments) Regulations, 2015 which requires an Accounting Officer to ensure
that the County Government entity develops risk Management strategies, which include
fraud prevention mechanism; and a system of risk Management and internal control that
builds robust business operations.
In the circumstances, the risks to operations of the County Assembly may not be
identified, their significance estimated, likelihood of occurrence determined and mitigation
measures put in place to contain their possible effects.
287. Failure to Establish Performance Management Steering Committee and Staff

Advisory Committee
Review of the County Assembly Service Board records indicate that the Staff Advisory
Committee and Performance Management Steering Committee are not in place. No
explanation has been provided by management for failure to constitute the two
committees.
This was contrary to Section A.4 of County Assembly Human Resource Manual, 2015
which provides that there will be three (3) Committees set up to aid in the management
of employees’ issues. These include the Performance Management Steering Committee
which will offer support in Performance Management functions within the County
Assemblies. In addition, it was contrary to Section 29 of the County Assembly Service
Act, 2017 which states that the Board shall establish a committee to be known as the
114
Staff Advisory Committee which shall be responsible for advising the Board, through the
Committee, on matters relating to staff.
In the absence of the staff advisory and performance management steering committees,
matters pertaining to staff and performance of the County Assembly may not be managed
effectively.
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COUNTY ASSEMBLY OF ELGEYO/MARAKWET– NO.28

288. Variance Between Financial Statements and IFMIS Reports
The statement of receipts and payments reflects total revenue and expenditure of
Kshs.715,385,935 and Kshs.714,911,014, respectively for the year ended
30 June, 2023. However, the balances differed with the Integrated Financial Management
Information System (IFMIS) ledger balances as detailed below:
Financial Amounts in
Statements IFMIS
Amounts Reports Variances
Receipts (Kshs.) (Kshs.) (Kshs.)
Transfers from the County 715,385,935 4,867,479 710,518,456
Treasury/Exchequer Releases
Payments
Transfer to Other Government Entity 94,000,000 - 94,000,000
Acquisition of Assets 26,855,563 182,705,563 (155,850,00
0)
Finance Costs, including Loan Interest - 1,821 (1,821)
No explanation was provided by Management for the variances between the two sets of
records.
In the circumstances, the accuracy and completeness of the financial statements could
not be confirmed.
289. Irregular Payment of Allowances to Administration Police Service Officers

respect of compensation of employees as disclosed in Note 4 to the financial statements.
This expenditure includes an amount of Kshs.1,461,000 being extraneous allowances
and PAYE deductions paid to administration police officers attached to the County
Assembly premises. However, the expenditure incurred was not an approved vote in the
annual budget but the police officers were even paid extra allowances for undertaking
their primary duties of safe guarding government property and vital installations. Further,
the extraneous allowances were paid directly to the personal account of the police officers
instead of The National Treasury contrary to Section 104(3) of National Police Service
Act, 2011 which requires that the money paid for the private use of police as specified in
Sub Section (1) shall be paid to The National Treasury.
116
In the circumstances, the regularity and value for money for the compensation of
employees amounting to Kshs.1,461,000 could not be confirmed.
Emphasis of Matter
290. Late Transfers from the County Revenue Fund (CRF)
The statement of receipts and payments reflects transfers from the County Revenue Fund
amount of Kshs.715,385,935 as disclosed in Note 1 to the financial statements. Included
in this amount is Kshs.33,939,411 transferred from the County Revenue Fund into the
County Assembly bank account on 6 July, 2023.
In the circumstances, the late disbursement from the County Revenue Fund may have
affected the timely implementation of approved programmes in the County and impacted
negatively on service delivery to the public.
Other Matter
In the audit report of the prior year, under the report of financial statements and Report
on Lawfulness, Effectiveness in use of Public Resources and the report on Internal
Controls, Risk Management and Governance several issues were raised. However, the
Management had not resolved the issues or given any explanation for failure to
implement the recommendations.

RESOURCES

During the year under review, the County Assembly had two hundred and eight (208)
permanent employees out of whom two hundred and four (204) or 98% were from the
dominant ethnic community in the County. Further, one hundred and thirty-four (134)
employees were recruited during the year all of whom (100%) were from the dominant
community. This was contrary to Section 65(1)(e) of the County Governments Act, 2012
which states that in selecting candidates for appointment, the County Public Service
Board shall consider the need to ensure that at least thirty percent of the vacant posts at
entry level are filled by candidates who are not from the dominant ethnic community in
the County.
293. Non-Compliance with One Third Rule on Basic Pay
During the financial year, thirteen (13) employees earned net pay of less than a third of
their basic salary. This was contrary to Part D (2) of County Human Resource Manual,
117
2013 which states that a Public Officer will be expected to retain a net salary of not less
than 1/3 of his basic salary per month. The over commitment of salary may result to
pecuniary embarrassment.

AND GOVERNANCE
294. Payment of Salaries Outside Integrated and Personnel Payroll Database

(IPPD)
The statement of receipts and payments reflects compensation of employees’ amount of

Kshs.247,558,046 and as disclosed in Note 4 to the financial statements which include
salaries amounting to Kshs.42,262,834 paid outside IPPD. No explanation has been
provided for the processing of the wages outside the IPPD system.
In the circumstances, the existence of an effective control in respect of payment of

compensation of employees could not be confirmed.
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COUNTY ASSEMBLY OF NANDI – NO.29
295. Unsupported Use of Goods and Services Amount
foreign travel and subsistence allowances amount of Kshs.36,930,966. Examination of
payment vouchers and supporting documents revealed that an amount of
Kshs.23,237,776 was paid as per diem to Members of County Assembly and the
secretariat for a benchmarking trip to Uganda, which were not supported by concept notes
and 3 months’ notice in line with Sections i(a) and (b) of the Office of the President circular
No. OP/CAB.1/7A dated 26 January, 2015 which states that all official international visits
be coordinated through the Ministry of Foreign Affairs and International Trade with at least
three months’ notice/window from the date of request and to hasten the process, all
requests should be accompanied by a concept note, name of leader of the delegation
and his/her bio-data and delegation list.
Further, the balance includes other operating expenses amount of Kshs.42,246,062

which further includes Kshs.281,898 paid to a commercial bank. Review of records
provided show that the amount is made up of interest at 1.5% of principal amount and
excise duty at 20% of interest charged on a short-term borrowing of Kshs.15,661,048
which the County Assembly secured from a commercial bank, to pay salary advances for
July, 2022. However, the short-term borrowing was not approved by the County
Assembly.
In the circumstances, the accuracy and propriety of use of goods and services amounting
296. Over-Payment of Commuter Allowance
The statement of receipts and payments reflects compensation of employees amount of

Kshs.377,018,607 which as disclosed in Note 4 to the financial statements includes
personal allowances paid as part of salary amounting to Kshs.156,926,627. However,
review of records provided revealed that Members of the County Assembly were sworn
in on 21 September, 2022 but were paid commuter allowance for the whole month of
September, 2022 when they qualified for a commuter allowance for two return journeys
only. This led to overpayment of commuter allowances by Kshs.661,527 excluding Pay
As You Earn.
In the circumstances, the accuracy and propriety of personal allowances paid as part of
salary amounting to Kshs.661,527 could not be confirmed.
119
Other Matter
In the audit report of the previous year, several issues were raised. However,
Management has not resolved and disclosed the status of all the prior year audit matters
as prescribed in the reporting requirements set by the Public Sector Accounting
Standards Board. Management has not provided satisfactory explanation for the delay in
resolving the issues.

RESOURCES
298. Non-Compliance with the One-Third of Basic Salary Rule
Review of the payroll for the year revealed that seventeen (17) employees of the County
Assembly received net salaries which were less than a third of their respective basic
salaries. This was contrary to Section 19(3) of the Employment, 2007 which requires that
an employee’s salary should not be deducted beyond two thirds of the basis salary. The
over-commitment of salary may result to pecuniary embarrassment.
299. Processing of Salaries Outside the Integrated Personnel and Payroll

Database (IPPD) System
The statement of receipts and payments reflects compensation of employees’ amount of

Kshs.377,018,607 which include salaries amounting to Kshs.9,329,845 paid outside
IPPD System. No explanation has been provided for the processing of the wages outside
the IPPD system. This was contrary to Section 1.5.1 of the Treasury Guidelines through
the Financial Accounting Recording and Reporting manual which requires that each
County Government department is responsible for populating the IPPD with the
information contained in these documents, issuing each appointee with a unique payroll
number from the system, and providing the appointee with a letter of appointment. The
salaries, allowances and/or arrears of County Government staff are processed on the
IPPD at every month end.
During the year under review, the total number of employees of the County Assembly
was eighty-one (81) out of which eighty (80) or 99 % of the total number were members
of the dominant ethnic community in the County. This was contrary to Section 7(1) and
(2) of the National Cohesion and Integration Act, 2008 which states that, “all public offices
shall seek to represent the diversity of the people of Kenya in the employment of staff and
120
that no public institution shall have more than one-third of its staff establishment from the
301. Irregular Remittance of Pay As You Earn (PAYE) on Gratuity Payments
The statement of receipts and payments reflects compensation of employees’ expenses

amounting to Kshs.377,018,607 which includes an amount of Kshs.5,863,647 being
PAYE on gratuity benefits for forty (40) Members of the County Assembly (MCAs) who
served between 2017 and 2022.
However, the County Assembly paid the amount from voted provision for the year under
review instead of utilizing PAYE deducted from the monthly earnings of the MCAs.
Although Management explained that PAYE was deducted monthly from the amounts
paid to the MCAs, it was not clear why the deducted amounts were not used in settling
the taxes due. Further, it was not clear in which account the amounts deducted were held.
This was contrary to Section 104(i) of the Public Finance Management Act, 2012 which
requires each County treasury to put in place proper management and control of, and
accounting for finances of County Government and its entities in order to promote efficient
and effective use of County’s budgetary resources.
302. Unapproved Foreign Trainings
of Kshs.244,309,354 which includes foreign travel and subsistence expenses of
expenditure documents in support of the foreign travel and subsistence revealed that an
amount of Kshs.8,677,850 was paid as per diem to staff to facilitate attendance for various
trainings. It was not clear why all the courses could not be undertaken locally. This was
contrary to Section 4.2.1 of the guidelines on managing training in the Public Service
which provides that approval to train in foreign based institutions will be granted only in
instances where the course applied for is not available in any local institution.
In the circumstances, value for money on the expenditure of Kshs.8,677,850 could not be
confirmed.
303. Delayed Construction of Modern County Assembly Chambers, Offices, and

Auxiliary
The statement of receipts and payments reflects acquisition of assets expenditure of

Kshs.47,444,680 which as disclosed in Note 10 to the financial statements, includes
expenditure amounting to Kshs.21,880,180 made to two contractors in respect of
construction of Modern County Assembly chambers, offices and auxiliary amenities at a
contract sum of Kshs.469,469,934. However, physical inspection done in the month of
121
August, 2023, revealed that the project, was about 80% complete but the contractor was
not on site.
In the circumstances, the value for money obtained for the expenditure amounting to
Kshs.21,880,180 paid to the contractor during the year under review on the project could
not be confirmed.

AND GOVERNANCE
governance.
122
COUNTY ASSEMBLY OF BARINGO – NO.30
305.1 Variances Between the Amounts in the Financial Statements and IFMIS
Review of the statement of receipts and payments revealed that some balances in the
statement significantly differ with corresponding balances in the Integrated Financial
Management Information System (IFMIS) records as summarized in the table below;
Financial
Statements’
Balances IFMIS Balances Variance
Description (Kshs) (Kshs) (Kshs)
Compensation of 371,293,490 361,910,662 9,382,828
Employees
Use of Goods & Services 332,584,681 330,870,128 1,714,553
Social Security 0 1,319,594 (1,319,594)
305.2 Inaccurate Opening Cash Balances
The statement of financial assets and liabilities reflects comparative cash balances of
Kshs.107,600 instead of a Nil balance. The reported comparative balance instead relates
to imprests and advances balances.
In the circumstances, the accuracy and completeness of the financial statements could
not be confirmed.
306. Unsupported Foreign Travel and Subsistence Expenditure
includes foreign travel and subsistence expenditure of Kshs.49,776,300 out of which
Kshs.24,052,354 was spent on foreign trainings. However, supporting documents
including training needs assessment, justification that the trainings were not locally
available and relevant approvals by the Human Resource Advisory Committee was not
provided for audit.
In the circumstances, the propriety, accuracy and completeness of foreign travel and
subsistence expenditure of Kshs.24,052,354 could not be confirmed.
123
307. Undisclosed Retentions and Deposits
The statement of financial assets and liabilities reflects Nil balance under retentions and
deposits. However, records provided for audit indicated that there was retention fees of
Kshs.3,690,598 during the year under review and Kshs.3,545,326 in the prior year.
In the circumstances, the accuracy and completeness of the Nil balance for retentions
and deposits could not be confirmed.
Emphasis of Matter
308. Pending Bills
Annex 1 on pending accounts payable reflects pending bills balance of Kshs.8,860,269.

However, the development vote book as at 30 June, 2023 reflects an outstanding
commitment balance of Kshs.29,880 resulting to an unreconciled and an unexplained
balance of Kshs.8,830,389.
Failure to settle bill in the year they relate to distorts the financial statements and
adversely affects the budgeting prior of the subsequent year as they form first charge.
Other Matter
explanation for failure to adhere to the provisions of the standards prescribed by the
Public Sector Accounting Standards Board template.

RESOURCES
310. Non-Compliance with the Law on Ethnic Composition Requirement
Review of the of personnel records indicated that the County Assembly had a staff
complement of one hundred and fifty-seven (157) employees as at 30 June, 2023 out of
whom one hundred and twenty- nine (129) or 82 % were from the dominant ethnic
community in the County. This was contrary to the requirements of Section 7(2) of the
National Cohesion and Integration Act, 2008 which stipulates that no public establishment
shall have more than one third of its staff from the same ethnic community.

124
311. Failure to Implement E-Procurement System
amount of Kshs.332,584,681. Included in this amount are payments totalling
Kshs.20,504,737 made to various suppliers outside the e-Procurement module in IFMIS
contrary to Executive Order No.2 of 2018 on Procurement of Public Goods, Works and
Services by public entities Ref. No. OP/CAB39/1A that requires all procurement to be
undertaken through e-Procurement.
312. Irregular Payment on Subscriptions and Memberships
Note 3 to the financial statements reflects other operating expenses of Kshs.14,510,028

which includes Kshs.820,000 paid to Society of Clerks At The Table (SOCATT) and
County Assembles Forum (CAF) as annual subscription fees. The operational expenses
for the structures and institutions established under Intergovernmental Relations Act,
2012, are however supposed to be provided for in the annual estimates of the revenue
and expenditure of the National Government.
313. Delayed Completion of the County Assembly’s Chamber and Speaker’s

Office
The statement of receipts and payments reflects acquisition of assets of Kshs.49,670,882

which includes Kshs.4,893,171 in respect of proposed finishes of the County Assembly
chamber and speaker’s office as disclosed in Note 7 to the financial statements. The total
contract value for the works was Kshs.15,511,648 with a commencement date of
25 April, 2022 and expected completion date of 25 April, 2023 subsequently extended to
30 June, 2023. As at the close of the financial year, cumulative payments towards the
project amounted to Kshs.14,892,874 or 96% of the contract amount. However, despite
the extension of time, the project had not been completed and handed-over as at
30 June, 2023.
In the circumstances, value for money on the expenditure of Kshs.14,892,874 could not
be confirmed.

governance.
125
COUNTY ASSEMBLY OF LAIKIPIA – NO.31

315. Misclassification of Payments
amounting to Kshs.247,125,377. The amount includes domestic travel and subsistence
amounting to Kshs.68,034,695 as disclosed in Note 5 to the financial statements. Review
of records revealed that transfer to other Government entities totalling Kshs.1,642,000
was erroneously classified under domestic travel and subsistence.
In the circumstance, the accuracy, completeness and propriety of domestic travel and
subsistence amounting to Kshs.1,642,000 could not be confirmed.
316. Overpayment of House Allowance

to Kshs.213,028,060 as disclosed in Note 4 to the financial statements. The amount
includes house allowance totalling Kshs.2,261,833 which was paid to fifteen (15)
employees. However, the house allowance was paid at rates higher than those approved
by the Salaries and Remuneration Commission Circular Ref. SRC Circular
SRC/TS/MDP/3/1/2 (2) of 10 December, 2014, resulting in unexplained overpayments of
house allowance totalling Kshs.1,258,033.
In the circumstances, the accuracy and propriety of compensation of employees

Emphasis of Matter
317. Pending Bills Not Paid as First Charge
Other Disclosures Note 1 to the financial statements reflects accounts payables

amounting to Kshs.19,949,387. Management has not explained why bills were not settled
during the year when they occurred. Further, the amount includes pending bills totalling
Kshs.8,684,997 which were not supported by contractual documents, local purchase
orders or local service orders.
Failure to settle bills during the year to which they relate distorts the financial statements
for that year and adversely affects the provisions for the subsequent year to which they
have to be charged.
126
Other Matter
In the previous audit report several issues were raised under Report on Financial
Statements, Report on Lawfulness and Effectiveness in Use of Public Resources, and
Report on Effectiveness of Internal Control, Risk Management and Governance.
However, although the Management has indicated that some of the issues have been
resolved, the matters remained unresolved as the Senate and County Assembly has not
met to deliberate on the same.

RESOURCES
319. Irregular Training and Liaison Meetings
The statement of receipts and payments reflects expenditure under use of goods and
services totalling Kshs.247,125,377. The amount includes foreign travel and subsistence
allowances totalling Kshs.22,836,921 as disclosed in Note 5 to the financial statements.
Review of records revealed that an amount of Kshs.19,248,592 was paid to the County
Assembly officers who attended training in Tanzania. However, the training expenses
were not supported by back to office report detailing the benefits and experiences gained
from the training. This was contrary to Executive Order SH/1/6XIV of 19 October, 2018
that requires public servants travelling outside the country to prepare a brief report and
submit to the approving authority within seven (7) days after their return. Further, the use
of goods and services amounting to Kshs.247,125,377 includes an amount of
Kshs.1,260,000 paid to Members of County Assembly (MCAs) as imprest to hold liaison
meetings on diverse dates. However, no back to office reports were provided to justify the
expenditure.
In the circumstances, the value for money and regularity of the foreign travel and liaison
320. Project Verification Reports
The statement of receipts and payments reflects acquisition of assets amounting to

Kshs.32,162,073. The amount includes refurbishment of buildings amounting to
Kshs.10,704,074 as disclosed in Note 10 to the financial statements. Review of records
revealed that an expenditure totalling Kshs.5,655,858 was incurred on construction of a
lift shaft and slab extension at the County Assembly of Laikipia and Kshs.4,995,574 was
incurred on construction of a junk yard. However, the projects which ought to have been
completed by May and August, 2023, respectively, were below seventy-percent (70%) in
completion level in November, 2023.
In the circumstances, the value for money for the payments on the two (2) projects
totalling Kshs.10,651,432 could not be confirmed.
127
During the year under review, the County Assembly had a total of seventy-eight (78)
employees out of whom fifty-nine (59) or 76% were from the dominant ethnic community
in the County. This was contrary to Section 7(2) of the National Cohesion and Integration
Act, 2008 which states that no public establishment shall have more than one third of its
staff from the same ethnic community.
Review of payroll records revealed that three (3) employees earned a net salary of less
than a third (1/3) of the basic salary. This was contrary to Section 19(3) of the Employment
Act, 2007 which states that the total amount of deduction of the wages of an employee
shall not exceed two thirds (2/3) of such wages.
323. Payment of Salaries Outside the Integrated Personnel and Payroll

Database (IPPD)

to Kshs.213,028,060 as further disclosed in Note 4 to the financial statements. The
amount includes an amount of Kshs.46,205,272 paid to employees outside the
Integrated Personal and Personnel and Payroll Data Base (IPPD). This was contrary to
The National Treasury Circular No.13/2012 dated 28 August, 2019 which requires
personnel emoluments to be controlled in the public personnel database and supported
by IPPD.
324. Irregular Payments

Kshs.247,125,377. The amount includes other operating expenses totalling
records revealed that the operating expenses includes subscription amount to
Kshs.794,000 paid to society of Clerks at the Table (SOCATT). This was contrary to
Section 37 of the Intergovernmental Relations Act, 2012 which requires the operational
expenses for the structures and institutions established under Intergovernmental
Relations Act, 2012, to be provided for in the annual estimates of the revenue and
expenditure of the National Government.
325. Failure to Implement E-procurement Processes

Information available indicates that payments in respect of acquisition of assets totalling
Kshs.21,457,999 were made. However, tender advertisement/requisition, opening of
128
tenders, evaluation of tenders and award of tenders were done outside the Integrated
Financial Management Information System (IFMIS). This was contrary to Regulation
49(2) of the Public Procurement and Assets Disposal Act, Regulations, 2020 which
require procurement procedures for the supply of goods, works and services by a
procuring entity to be on an e-procurement system which is integrated to the state portal.

326. Lack of a Risk Management Policy and Disaster Recovery Plan
The County Assembly of Laikipia has not developed a risk management policy to guide
its management on risk management assessment and fraud preventive mechanisms for
both its financial, human resource and operational systems. Further, a disaster recovery
plan and a backup and retention strategy have also not been implemented. The lack of
disaster recovery strategy exposes the County Assembly’s operations and information to
potential loss in the event of the occurrence of risk.
327. Lack of Approved Information Technology (IT) Security Policy
As previously reported, the County Assembly did not have an approved IT policy for
governance and management of its ICT resources. There is no steering committee in
place to assist in the development of ICT policy framework to enable the County Assembly
to realize long-term strategic goals.
Further, lack of an approved IT policy may result in an unclear direction regarding

maintenance of information security across the organization and safeguarding the County
Assembly’s ICT assets.
In addition, without a sound and approved framework, users may not have any rules and
procedures to follow in order to minimize risk of errors, fraud and the loss of data,
confidentiality and integrity.
The County Assembly risks losing the assets due to lack of clear accountability policy.
328. Use of Personal Emails for Official Government Business
Review of correspondences and interview with the ICT Director revealed that most of the
workers were using personal emails for official government business despite being
provided with official email addresses as evidenced by an authorization for payment of
imprest which was issued through a personal email contrary to the Head of public service
circular SH/ADM 23(1) dated 14 June, 2022 on Government ICT standards, 2019.
This may jeopardize the security and confidentiality of the County Assembly’s affairs.
129
COUNTY ASSEMBLY OF NAKURU – NO.32
329. Non-Adherence to Cut-Off
The statement of receipts and payments reflects transfers from County Revenue Fund
(CRF) as disclosed in Note 1 to the financial statements amount of Kshs.1,770,069,191.
However, the amount includes Exchequer releases amount of Kshs.189,635,574
received after 30 June, 2023. Further, the statement reflects total payments of
Kshs.1,770,075,918 out of which Kshs.136,808,853 were expenditures made after the
year end.
In the circumstances, the accuracy and completeness of transfers from CRF amount of
Kshs.1,770,069,191 and total payments of Kshs.1,770,075,918 could not be confirmed.
The statement of receipts and payments reflects compensation to employees amount of

Kshs.383,114,160 as disclosed in Note 4 to the financial statements. However,
supporting documents and schedules reflects amount of Kshs.355,824,196 resulting to
an unexplained variance of Kshs.27,289,964. In addition, compensation of employees’
balance includes salary payments of Kshs.6,576,560 for officers on secondment which
ought to be paid / reimbursed by the host organization.
In the circumstances, the accuracy and propriety of the compensation of employees

cost of Kshs.383,114,160 could not be confirmed.
331. Unsupported Imprests and Advances
The statement of financial assets and liabilities reflects imprests and advance balance of
Kshs.230,000 as disclosed in Note 12 to the financial statements. However, detailed
schedules indicating the opening balances, imprests issued, surrenders and closing
balances were not provided for audit.
In the circumstance, the accuracy and completeness of imprests and advance balance of
Kshs.230,000 could not be ascertained.
332. Inaccuracies in Acquisition of Assets
As previously reported, annex 4 on summary of non-current asset register reflects

comparative historical asset cost of Kshs.1,148,484,472. However, the balance excludes
the value of land on which the County Assembly offices are situated. Further, the balance
included transport equipment valued at Kshs.76,542,873 which differs with the supporting
schedule amount of Kshs.79,242,873 resulting to an unexplained and unreconciled
variance of Kshs.2,700,000.
130
In the circumstances, the accuracy and completeness of assets balance of
Kshs.1,148,484,472 could not be confirmed.
Emphasis of Matter
333. Pending Bills

Annex 1 – Analysis of pending accounts payable to the financial statements reflects
pending bills balance of Kshs.59,200,501. Management did not explain why the bills were
not settled during the year when they occurred.
Failure to settle bills during the year to which they relate to distorts the financial
statements and adversely affects the budgetary provisions for the subsequent years as
Other Matter

Lawfulness and Effectiveness in Use of Public Resources and Report on Effectiveness
of Internal Controls, Risk Management and Governance which have remained unresolved
as at 30 June, 2023.

RESOURCES

335. Irregular Payments
includes an expenditure of Kshs.5,747,320 incurred on membership fees, dues and
subscriptions to professional and trade bodies out of which an amount of Kshs.5,450,000
was paid to Society of Clerks at the Table (SOCATT) and the County Assemblies Forum
as annual subscription fees. However, review of records revealed that these entities are
not intergovernmental relation in legal capacity and the payments were not budgeted for.
336. Unauthorized Expenditure
The statement of receipts and payments reflects acquisition of assets amount of

Kshs.193,992,614 as disclosed in Note 8 to the financial statements. The balance
includes an amount of Kshs.45,216,103 on construction of buildings out of which an
amount of Kshs.31,946,383 was expenditures in respect of non-residential buildings
(offices, schools, hospital) and Kshs.4,100,000 on other infrastructure and civil works
131
which were not budgeted for. This was contrary to Regulation 53(1) of the Public Finance
Management (County Governments) Regulations, 2015 which states that except as
provided for in the Act and these Regulations, an Accounting Officer of an entity may not
authorize payment to be made out of funds earmarked for a specific activity for purposes
other than those activities.
337. Discriminative Procurement Process

Kshs.193,992,614 which, as disclosed in Note 8 to the financial statements includes an
amount of Kshs.4,100,000 spent on Solarization of the County Assembly lighting system.
The system was procured through an open tender advertised for provision of bulk printing
services and proposed renovation of offices and installation of solar security light within
County Assembly premises. However, one of the mandatory requirements in the tender
documents was " a valid business permit issued by Nakuru County Assembly,” yet an
open tender is supposed to give equal opportunity to all tenderers. The condition was
discriminative to other tenderers from other towns in Kenya. This was contrary to Section
157(1) of the Public Procurement and Asset Disposal Act, 2015 which states that
candidates shall participate in procurement proceedings without discrimination except
where participation is limited in accordance with this Act and the regulations.
338. Unapproved Refurbishment of the Buildings

Kshs.193,992,614 as disclosed in Note 8 to the financial statements. Included in the
amount is Kshs.15,642,591 relating to refurbishment of the building out of which an
amount of Kshs.4,619,120 was incurred on improvement of the leeway road to executive
residence that was not supported by the approval letter from the County Government.
In the circumstances, value for money incurred on the refurbishment of buildings amount

Conclusion
governance.
132
COUNTY ASSEMBLY OF NAROK – NO.33

340. Variances Between Financial Statements and Integrated Financial
Management Information System (IFMIS) Balances
The financial statements reflect balances that differ with Integrated Financial
Management Information System records as detailed below;
Financial Statements IFMIS Balances Variance

Particulars Kshs. Kshs. Kshs.
Transfer to Other 235,000,000 245,000,000 10,000,000
Government Entities
Acquisition of Assets 56,281,181 55,421,368 859,813
Government Imprests 0 7,496,367 7,496,367
Domestic Debtors and
Advances 0 11,518,161 11,518,161
Provision for Encumbrance 0 307,419,569 307,419,569
Development Bank Account 0 70,692,149 70,692,149
In the circumstances, the accuracy and completeness of balances reflected in the

financial statements could not be confirmed.
341. Inaccuracies in Expenditure on Compensation of Employees
The statement of receipts and payments reflects compensation of employees’ balance

payroll by product reflects an amount of Kshs.504,259,996 resulting to an unreconciled
variance of Kshs.2,320,697.
In the circumstances, the accuracy and completeness of expenditure on compensation

of employees of Kshs.501,939,299 could not be confirmed.
342. Unsupported Acquisition of Assets
The statement of receipts and payments reflects expenditure on acquisition of assets of

Kshs.56,281,184 out of which Kshs.23,532,108 was paid to ten (10) contractors for
renovation of various buildings and structures. However, the renovation works were not
supported by pre- and post-inspection reports by the Department of Public Works. It was
therefore not possible to ascertain the scope of the renovation works carried out. Further,
133
the expenditure includes an amount of Kshs.5,780,357 that is not related to refurbishment
of buildings and structures.
In the circumstances, the occurrence, completeness and accuracy of expenditure on
acquisition of assets of Kshs.56,282,184 could not be confirmed.
Other disclosure Notes to the financial statements reflects pending accounts payable
balance of Kshs.30,887,215. However, review of records revealed that the County
Assembly owed the Local Authorities Provident Fund (LAPFUND) contributions in arrears
(principal amount and interest) of Kshs.103,647,243 out of which Kshs.34,843,561 was
paid leaving a balance of Kshs.68,803,682 which was not disclosed in the financial
statements. Further, contributions due to Local Authorities Pensions Trust (LAPTRUST)
of Kshs.11,104,350 were not remitted and had accrued interest amounting to
Kshs.70,678,826 as at 30 June, 2023, which was also not disclosed in the financial
statements.
In addition, the balance includes suppliers of services a balance of Kshs.28,880,255 out

of which an amount of Kshs.4,5000,000 was owed to a law firm for legal services.
However, the fee notes for the legal services did not indicate the nature of services
offered. Further, procurement records and signed contract for the provision of the legal
services were not provided for audit. It was therefore not possible to confirm whether the
legal fees commitment was as per the rates prescribed by the Law Society of Kenya.
In the circumstances, the completeness, accuracy and presentation of accounts payables

Emphasis of Matter
reflects final receipts budget and actual amount on a comparable basis of
Kshs.1,208,955,593 and Kshs.1,085,575,145 respectively, resulting to an underfunding
of Kshs.123,380,448 or 10% of the budget. Similarly, the statement reflects total
expenditure budget of Kshs.1,208,955,593 against an actual on comparable basis of
Kshs.1,085,512,368 resulting in overall under-expenditure of Kshs.123,443,225 or 10%
of the approved budget.
The underfunding and under-expenditure impact negatively on the delivery of services to
the residents of Narok County.
134
Other Matter
the Financial Statements, Report on Lawfulness and Effectiveness in Use of Public
Governance which have remained unresolved as at 30 June, 2023.

RESOURCES
346. Non-Compliance with the Law on Payment of Pending Bills
Annex 1 to the financial statements reflects analysis of pending accounts payable of

Kshs.30,887,215 relating to 2020/2021 and earlier years. However, Management has not
provided any explanation for failure to settle the bills as first charge in compliance with
Regulation 41(2) of the Public Finance Management (County Governments) Regulations,
2015 which prioritize debt payments as a first charge. Further, the documentary evidence
in support of pending accounts payables were not provided for audit review.
During the year under review, twenty-four (24) employees earned a net salary of less than
a third (1/3) of the basic salary. This was contrary to Section D22(2) of the County Public
Service Human Resource Manual and Section 19(3) of the Employment Act, 2007 which
requires that the total amount of deductions which may be made by an employer from the
wages of his employee at any one time shall not exceed two-thirds of the basic pay.
Management did not give explanation for the failure to comply with the law.
In the circumstances, Management was in breach of the law and may expose the staff to
pecuniary embarrassment.
348. Non-Remittance of Statutory Deductions
Review of documents provided for audit revealed that the County Assembly deducted
pension contributions totalling Kshs.11,104,350 for Local Authorities Pensions Trust.
However, no documentary evidence was provided to support remittance of the
deductions.
135
AND GOVERNANCE
,
During the year under review, the County Assembly did not have a Risk Management
Policy in place and therefore had no approved processes and guidelines on how to
mitigate operational, legal and financial risks of the County Assembly.
In the circumstances, the effectiveness of Management to identify and mitigate emerging

risks in the day to day operations could not be confirmed.
350. Failure to Update Non-Current Assets Register
Annex 4- summary of non-current asset register to the financial statements reflects the
asset balance of Kshs.200,829,252. The balance includes buildings and structures of
Kshs.153,161,258. However, the value of land on which the buildings and structures
stand has not been disclosed and the title of the land was not provided for audit.
Further, included in the summary of non-current asset balances is transport equipment

valued at Kshs.17,840,000 which were grounded for which management has not
indicated plans for their repairs and putting into use.
In the circumstances, the effectiveness of the asset management measures put in place
by the County Assembly could not be confirmed.
136
COUNTY ASSEMBLY OF KAJIADO – NO.34

351. Misclassification of Expenditure – Other Operating Expense
statements reflect use of goods and services amounting to Kshs.407,612,751. Included
in the amount is Kshs.39,436,076 relating to other operating expenses. Review of records
provided revealed that an amount of Kshs.1,970,000 paid for provision of training services
was wrongly charged to other operating expense.
In the circumstances, the accuracy of other operating expense amounting to

352. Presentation and Disclosure Errors in the Financial Statements
The statement of financial assets and liabilities and the statement of cashflows reflects
prior year adjustments of Kshs. 8,767,856. However, the corresponding Note 17 discloses
changes in imprest and advances with Nil balances. Further, the statement of cashflows
reflects an increase in accounts payable of Kshs.4,310,444 under Note 19 which does
not exist in the financial statements.
In the circumstances, the accuracy and completeness of prior year adjustments of

Kshs.8,767,856 and increase in accounts payable of Kshs.4,310,444 could not be
confirmed.
Emphasis of Matter
The statement of comparison of budget and actual amounts; recurrent and development
reflects total budgeted receipt and actual on comparable basis of Kshs.1,047,066,117
and Kshs.941,094,383 respectively, resulting in a shortfall of Kshs.105,971,734 or 10 %
of the budget. Similarly, the County Assembly expended Kshs.941,089,062 against a
budget of Kshs.1,047,066,117 resulting to an under-expenditure of Kshs.105,977,055 or
10% of the budget.
In the circumstances, the under-funding and under-expenditure affected implementation

of the planned projects and programs and may have impacted negatively on service
delivery to the public.
137
354. Pending Bills
Annex one to the financial statements reflects analysis of pending accounts payable
amount of Kshs.39,061,032 which ought to have been settled during the year under
review but were instead carried forward to the year 2023/2024. No satisfactory
explanation was provided for failure to settle the pending bills during the year.
Other Matter
355. Prior Year Matters
explanation for the failure to adhere to the provisions of the Public Sector Accounting
Standards Board reporting template.

RESOURCES
356. Non-Compliance to the One Third Rule on Basic Pay
Review of the payroll for the month of June, 2023, revealed that a number of employees
had over committed their salaries beyond the two third limit as provided for by Section
19(3) of the Employment Act, 2007. Non-compliance to the one third rule on basic pay
may result in pecuniary embarrassment to the employees of the County Assembly.
Review of human resource records at the County Assembly reveals that there were one
hundred and eighty-five (185) employees out of whom one hundred and forty (140) or
76% were from the dominant ethnic community in the County. This is in contravention of
Section 7(2) of the National Cohesion and Integration Act, 2008 which requires that no
public establishment shall have more than one third (1/3) of its staff from the same ethnic
community.
358. Irregular Subscription Payments to Society of Clerks at the Table
statements reflects use of goods and services amounting to Kshs.407,612,751. The
138
amount includes an expenditure of Kshs.39,436,076 incurred on other operating
expenses out of which Kshs.750,000 was paid to Society of Clerks at the Table
(SOCATT). However, review of records revealed that the Society was not an
intergovernmental relation body in legal capacity and the payment was not budgeted for
under the County Assembly’s estimate contrary to Section 42(1)(b) of the Public Finance
Management (County Governments) Regulation, 2015 which requires the accounting
officer to ensure public funds are applied for purposes for only which they were intended
and appropriated by the County Assembly.
359. Irregular Engagement of Consultants of Legal Services
statements reflect use of goods and services of Kshs.407,612,751. Included in this
balance is an amount of Kshs.39,436,076 for other operating expense which includes
Kshs.4,264,000 being payments for legal fees. However, scrutiny of documents provided
revealed that the County Assembly engaged consultants to render legal services without
the approval of the County Attorney in contravention to Section 7(a) of the Office of the
County Attorney Act of 2020, which places the County Attorney as the principal legal
adviser of the County Government.
360. Stalled Works on County Assembly Chambers
The Management engaged a contractor for the construction of County Assembly

Chambers at a contract sum of Kshs.577,973,400. The project commencement date was
27 March 2017 for a period of five (5) years, to be completed on 26 March, 2022. Review
of project documents and physical verification during the month of November, 2023
revealed that the project stalled nine (9) months to completion date, in July, 2021 at 34%
completion level. By November, 2023, an amount of Kshs.192,459,775 had been paid to
the firm.
Further, the performance bond expired on 13 March, 2022 and had not been renewed
which exposes the project to possibility of loss should the contractor fail to deliver the
project as per the contract terms. Demand letter dated 11 March, 2022, to the financier
to pay Kajiado County Assembly an amount of Kshs.20 million has not been honoured to
date.
In the circumstances, the public may not derive value for money for Kshs.192,459,775
spent on the project.
361. Non-Adherence to the Procurement Plan Reservations for the Special

Groups
use of goods and services of balance of Kshs.407,612,751. Included in this balance is an
amount of Kshs.3,933,672 used for office and general supplies services. Review of
139
procurement plan revealed that the item was 100% reserved for youth and request for
quotations method of procurement was used. However, scrutiny of procurement
documents and processes revealed that bidders who were awarded contracts to supply
office stationeries had not attached AGPO certificates which was a mandatory
qualification. This was contrary to Section 157(6) of the Public Procurement and Asset
Disposal Act, 2015 which requires a candidate to provide evidence of eligibility for a
specific preference or reservation.


362. Unupdated Fixed Asset Register
Review of the fixed assets register revealed that the value of two parcels of land had not
been recorded contrary to Section 136(2) of the Public Finance Management (County
Governments) Regulation, 2015 which requires the recording of each land and building
in an asset register including the related capital expenditure. Further, the parcels of land
did not have ownership documents.
In the circumstances, the existence of a proper control system for assets and preventive
mechanisms to eliminate theft, security threats, losses, wastage and misuse and ensuring
that movement and conditions of the assets can be tracked could not be confirmed.
140
COUNTY ASSEMBLY OF KERICHO – NO.35

363.1 Variances in Comparative Amounts
The statement of receipts and payments reflects comparatives balance in respect of use
of goods and services of Kshs.340,558,356 which, as disclosed in Note 5 to the financial
statements includes balances of Kshs.5,524,071 and Kshs.2,745,076 in respect of rentals
of produced assets and specialized materials and services respectively. The amounts are
at variance with the previous years audited amounts of Kshs.4,775,912 and
Kshs.3,493,235 in the re-stated financial statements for the year 2021/2022 resulting to
unexplained and unreconciled variance of Kshs.748,159 for each expenditure item.
In the circumstances, the accuracy and completeness of the balances in respect of rentals
of produced assets and specialized materials and services could not be confirmed.
363.2 Variances Between Financial Statements and Integrated Financial

Management Information System (IFMIS) Reports
The financial statements presented for audit and the Integrated Financial Management
Information Systems (IFMIS) reports provided for audit had significant variances as
detailed below:
Financial
Statements IFMIS Variance
Item Description (Kshs.) (Kshs.) (Kshs.)
Transfers from CRF 914,130,822 895,685,204 18,445,618
Transfer to Other Government 115,318,307 210,859,696 95,541,389
Entities
Social Security Benefits 51,638,558 42,421,308 9,217,250
Accounts Payables - Deposits - 2,270,924,971 (2,270,924,971)
The variances have not been explained or reconciled.
364. Unsupported Foreign Travel and Subsistence Expenditure

statements includes foreign travel and subsistence expenditure of Kshs.55,162,680. The
payments were made to Members of County Assembly and staff to cater for trips to seven
141
(7) foreign countries. However, justification that the trainings were not locally available
and the training needs assessment in support of the foreign trainings were not provided
for audit.
In the circumstances, the accuracy and regularity of the expenditure amounting to

Kshs.55,162,680 in respect of use of foreign travel and subsistence expenditure could
not be confirmed.
365. Non-Disclosure of Retentions and Deposits
The statement of financial assets and liabilities reflects Nil balance in respect of third-
party deposits and retentions as disclosed in Note 15 to the financial statements.
However, retention and deposits records provided for audit indicate that the County
Assembly had withheld total amount of Kshs.647,813 in respect of retention fees. No
evidence was provided to disclose proof that the retention amount was safely kept and
available for payment as and when they are due. Further, supporting documents including
bank statements and interim payment certificate (IPC) were not provided for audit.
In the circumstances, the accuracy and completeness of the Nil balance in respect of
third-party deposits and retention could not be confirmed.

RESOURCES
366. Irregular Multiple Salary Advances to Staff
Review of the salary advance register revealed that sixteen (16) members of staff were
issued with salary advances totalling Kshs.1,504,909 before clearing the previous
advances. This was contrary to Policy C.6.4 of the Human Resource Policies and
Procedures Manual for the Public Service of May, 2016 which states that salary advance
may be granted only when an officer has no other outstanding salary advance.
In the circumstances, Management was in breach the law.
Review of the payroll records for the month of June, 2023 revealed that eighty-eight (88)
staff and Members of the County Assembly earned net salaries of less than one third (1/3)
of their respective basic salaries pay. This was contrary to Section 19(3) of the
Employment Act, 2007 and Section C.1(3) Human Resource Policies and Procedures
Manual for the Public Service, 2016 which provides that the total amount of all deductions
which may be made by an employer from the wages of his employee at any one time
shall not exceed two-thirds of such wages or such additional or other amounts as may be
prescribed.
142
368. Irregular Payment to Society of Clerks-at-the-Table
amount of Kshs.299,971,998 as disclosed in Note 5 to the financial statements, which
includes an amount of Kshs.14,396,299 in respect of other operating expenses. The
expenditure includes subscription fees of Kshs.884,333 made to the Society of Clerks-at-
the-Table (SOCATT). However, the SOCATT does not draw its mandate from the
Constitution of Kenya or an Act of Parliament and payments to this organization was not
based on any law.
In the circumstances, payment of subscription fees of Kshs.884,333 was not prudent.

Kshs.34,084,624 as disclosed in Note 10 to the financial statements, which includes an
amount of Kshs.6,478,126 in respect of the construction and completion of speaker’s
residence. Review of the supporting documents including the payment vouchers and
procurement documents revealed that the County Assembly entered into a contract with
a local contractor to construct the Speaker’s residence at a contract price of
Kshs.34,595,580 which started on 02 August, 2019 with the expected completion date of
28 January, 2020. However, the project remained incomplete for more than four (4) years
after its commencement and after completion date had been extended six (6) times.
Further, the performance bond from a local bank provided by the contractor expired on
22 March, 2023 and had not been renewed and the contractor was on site without a valid
performance bond in contravention of Section 142 (1) of the Public Procurement and
Asset Disposal Act, 2015.
Further, the interim completion certificates detailing amount paid to the contractor and
retention fees were not provided for audit review. Review of certificate of practical
completion ‘as is’ issued on 16 June, 2023 indicated that the construction was completed
as per the full contract sum and ready for handing over. However, physical verification
undertaken in the month of November, 2023 revealed that the construction was still in
progress with internal and external finishes, plumbing, tiling, electrical works, interior
fittings and painting still not completed. This was contrary to Salaries and Remuneration
Commission (SRC) circular Ref. No. SRC/TS/CGOVT/3/61/VOL.V (52) dated 12 July,
2021 requiring the County Assemblies to hasten the construction of the official Speakers’
residences by setting the deadline at 30 June, 2022.
In the circumstances, value for money on the expenditure of Kshs.6,478,126 in respect

of the completion of speaker’s residence could not be confirmed.

governance.
143
COUNTY ASSEMBLY OF BOMET– NO.36

371. Unsupported Foreign Travel and Subsistence Allowance
statements reflects use of goods and services amount of Kshs.281,606,947 which
includes Kshs.47,335,480 in respect to foreign travel and subsistence to Members of
County Assembly attending training in seven (7) foreign countries. However, the foreign
trainings were not supported with training needs assessment and identifications of skill
gaps contrary to Section K.4.4 of County Assembly Human Resource Policies and
Procedures Manual of October, 2021 which stipulates that selection of trainees for all
training programs to be based on identified needs.
In the circumstances, the accuracy, completeness and regularity for the expenditure
amount of Kshs.47,335,480 could not be confirmed.
372. Unsupported Other Operating Expenses
statements reflect use of goods and services amount of Kshs.281,606,947 which includes
Kshs.14,699,353 in respect of other operating expenses which further includes
Kshs.1,042,440 in respect of rent for ward offices. However, the title deeds from the
landlords confirming land ownership and releasing of the offices to the County Assembly
In the circumstances, accuracy, completeness and regularity of other operating expenses

amount of Kshs.1,042,440 could not be confirmed.
Emphasis of Matter
373. Pending Bills
Other Important Disclosures and Annexure 1 to the financial statements reflects pending
accounts payable balance of Kshs.2,643,640 which were not settled during the year
under review but were carried forward to 2023/2024 financial year. However, supporting
documents including invoices, payment vouchers and procurement documents were not
provided for audit review. In addition, the dates when the goods and services were
incurred were not included in Annexure 1. Also, details of the pending bills indicating when
they were incurred and the movement to the current balance were not provided for audit
review.
Management did not explain why the bills were not settled as the first charge during the
year under review. This was contrary to Regulation 41(2) of the Public Finance
Management (County Governments) Regulations, 2015 which prioritizes debt payments
as a first charge.
144
have to be charged.
Other Matter
As disclosed under the progress on follow up of auditors’ recommendation section of the

financial statements, Management indicated that seven (7) prior year audit issues were
resolved with a balance of three (3) not resolved. However, Management did not provide
reports and invitations from the oversight committee’s detailing the deliberations and
recommendations of the committees.

RESOURCES
375. Irregular Payment of Salaries Outside the Integrated Payroll and Personnel
Database (IPPD) System
The County Assembly processed and paid forty-nine (49) employees and Members of the
County Assembly outside the prescribed Integrated Payroll Personnel Database (IPPD)
system contrary to The National Treasury Circular No.13/2019 dated 28 August, 2019,
which states that Integrated Payroll Personnel Database (IPPD) must support the
allocation of personnel emoluments. No explanation was provided by Management for
the use of the manual system.
Review of the payroll records revealed seventeen (17) employees received net pay below
a third (1/3) of their basic salary contrary to provisions of Section 19(3) of the Employment
Act, 2007, which stipulates that the deductions made by an employer from the wages of
his employee at any one time shall not exceed two-thirds of such wages or such additional
or other amount as may be prescribed.
377. Irregular Payment of Subscriptions to Professional Bodies
The County Assembly made payments of Kshs.750,000 and Kshs.700,000 relating to

subscription fees to the Society of Clerks-at-the-Table (SOCATT) and the County
Assemblies Forum (CAF) respectively. However, the payments were made without
budgetary allocation contrary to Regulation 31(a) and 50(2) of the Public Finance
145
Management (County Governments) Regulations, 2015 which requires that all
expenditure shall be entered into the budget and shall be committed only against
allocation and commitments approval.
Further, there is no existing law or policy in place authorizing the said payments of
subscription fees and no verifiable document was provided for audit to support the two
organizations Constitutional mandates.
The County Assembly awarded tender to construct the Speaker’s residence on

13 January, 2022 at a cost of Kshs.34,500,000 for a period of twenty-four (24) weeks
ending 16 September, 2022. Project records indicated that the contractor had been paid
a total amount of Kshs.12,578,000 equivalent to 36% of the contract amount against
certified works completed as at 30 June, 2023. However, physical verification in the month
of October, 2023 revealed that the construction was not complete after the initial contract
was extended by another twelve (12) months to 07 November, 2023. Plastering,
electrical, plumbing and painting works had not been completed and Management did not
provide for audit review the revised work schedule as well as the extended performance
bond.
In the circumstances, the value for money for Kshs.12,578,000 may not be realized from
the delayed works.

AND GOVERNANCE

379. Weak Information and Communication Technology (ICT) Controls
Review of the County Assembly's ICT Environment revealed that there was no reliable
information back-up plan in place. Management did not assess the impact of an outage
or disruption to the Information Communication Technology Systems such as the
Hansard System. Further, Management did not develop business continuity or
information technology disaster recovery plan and there was no IT Strategic Committee
which should provide governance on information technology matters.
In the circumstances, in case of a disaster, significant delays or disruptions of activities

may occur, the County Assembly may not recover or restore critical infrastructure services
and systems affecting all operations that rely on the Information Communication
Technology.
146
COUNTY ASSEMBLY OF KAKAMEGA – NO.37

380. Undisclosed Casual Workers Expenditure
The statement of receipts and payments reflects compensation of employees balance of

Kshs.497,900,738 as disclosed in Note 4 to the financial statements. Review of manual
payrolls revealed eleven (11) casual workers who were paid Kshs.1,848,800 which was
not disclosed in the financial statements. In addition, there was no evidence of approval
by the County Assembly Service Board to engage the casual workers.
In the circumstances, the accuracy and completeness of compensation of employees
expenditure of Kshs.497,900,739 could not be confirmed.
following unsatisfactory matters were noted;
381.1 Foreign Travel Payments
The amount includes foreign travel and subsistence expenditure of Kshs.27,683,670 out
of which Kshs.1,044,700 was paid as reimbursement of per diem and air tickets.
However, relevant supporting documents such as travel clearance by the authorized
officer, boarding passes, signed list of participants for each day of the meeting,
programme of the event and training certificates were not provided for review.
381.2 Hospitality Supplies and Services
Use of good and services includes hospitality supplies and services amount of
Kshs.59,641,172 out of which an amount of Kshs.6,870,000 was paid to various
contractors and suppliers. However, the payments were not supported by electronic tax
registers, local purchase/service orders, delivery notes, goods received notes, inspection
and acceptance certificates and quotations.
381.3 Office and General Supplies and Services
Included in use of goods and services is office and general supplies and services amount
of Kshs.9,613,382 out of which Kshs.2,457,500 was incurred on purchase of various
items that were not supported with procurement documents and stores records.
381.4 Routine Maintenance - Other Assets
Use of goods and services amount includes Kshs.10,645,217 relating to routine

maintenance - other assets out of which Kshs.9,985,037 was paid to various
147
contractors to repair hansard equipment, office furniture, painting of building and supply
of materials. However, the amount was not supported by inspection and acceptance
certificates or reports.
In the circumstances, the accuracy and completeness of use of goods and services
382. Inaccuracy of Outstanding Imprest
The statement of assets and liabilities reflects imprests and advances balance of
Kshs.52,848,455 as disclosed in Note 14 and Annex 5 to the financial statements.
However, the balance differs from Kshs.43,250,696 recorded in the imprest register and
imprest warrants resulting to an unexplained and unreconciled variance of
Kshs.9,597,759. In addition, no explanation was provided for failure to have the imprests
surrendered or accounted on due dates.
In the circumstances, the accuracy and completeness of the imprest and advances
383. Pending Accounts payables
Note 1 on Other Important Disclosures reflects pending accounts payables balance of

Kshs.88,000,000 being additions for the year under review. However, the balance omitted
opening balance of Kshs.53,028,597 reported in the audited financial statements for the
year ended 30 June, 2022. No explanation and documentary evidence was provided on
how the previous year’s balance was cleared.
Further, details of the pending bills indicating when they were incurred and the movement
to the current balance were not provided for audit review. Management did not explain
why the bills were not settled as the first charge during the year under review. This was
Regulations, 2015 which prioritizes debt payments as a first charge.
have to be charged.

RESOURCES
384. Irregular Salary Incremental Credits to Staff
Review of the payrolls revealed that staff members specifically those in Job Groups Q
and S (equivalent of CASB 4 and CASB 2 respectively) in the County Assembly earned
148
special salaries in the form of incremental credits amounting to Kshs.1,201,840. This was
done despite the staff having reached their maximum annual incremental limits.
No evidence was provided from the Salaries and Remuneration Commission approving
incremental credits payments. This was contrary to the Salaries and Remuneration
Review Commission review of salaries for County Government employees at the County
Assemblies which was effective from 1 July, 2020.
385. Non-Remittance of Statutory Dues
Review of the payrolls revealed that a total of Kshs.2,385,100 was deducted from
employees in respect of National Health Insurance (NHIF) contributions and
Kshs.36,670,569 in respect of Local Authorities Provident Fund (LAPFUND). However,
only Kshs.1,906,650 and Kshs.22,148,672 were remitted to the Funds resulting to
unremitted balances of Kshs.478,450 and 14,521,897 respectively. This was contrary to
Regulation 22(2)(a) of the Public Finance Management (County Governments)
Regulations, 2015, which requires Accounting Officers to comply with any tax, levy, duty,
pension, commitments and audit commitments as may be provided for by legislation.
386. Lack of Staff Ethnic Diversity
Review of human resource records including the payrolls indicated that the County
Assembly had eighty-seven (87) employees, out of whom eighty-four (84) employees or
97% were from the dominant ethnic community. This was contrary to Section 7(1) and (2)
of the National Cohesion and Integration Act, 2008 which states that, “all public offices
shall seek to represent the diversity of the people of Kenya in employment of staff and
that no public institution shall have more than one third of its staff establishment from the
387. Failure to Construct the Speaker’s Official Residence
During the year under review, the County Assembly paid Kshs.960,000 as house
allowances to the Speaker at a rate of Kshs.80,000 per month. This was contrary to SRC
Circular Ref. SRC/TS/CGOVT/3/61/VOL.V(44) dated 14 August, 2020 which extended
the deadline for meeting the directive on housing benefit to 30 June, 2022, on which date
the option for Counties paying rent or leasing houses for the eligible State Officers’ official
residential houses would cease.
388. Failure to Withhold VAT on Consultancy Services

149
statements, includes an amount of Kshs.28,763,276 relating to other operating expenses
out of which an expenditure of Kshs.11,766,474 was incurred on consultancy services.
However, the service providers were paid in full without withholding five (5) percent Value
Added Tax (VAT) contrary to Section 4(1) and (2) of the Income Tax Act, Cap.470.

389. Unsupported Overdrawn Bank Balances
The statement of financial assets and liabilities reflects an overdrawn bank balance of
Kshs.38,909,557 as disclosed in Note 13A to the financial statements which was in
respect to two (2) bank accounts. This was contrary to Section 119(4) of the Public
Finance Management Act, 2012, which prohibits an accounting officer of a County
Government entity from causing a bank account to be overdrawn beyond the limit
authorized by the County Treasury. No evidence was provided to show that the County
Treasury had authorized any limit hence it was not possible to confirm whether the two
overdrawn balances were within authorized limits.

AND GOVERNANCE
governance.
150
COUNTY ASSEMBLY OF VIHIGA – NO.38
Basis for Adverse Opinion
statements reflects an amount of Kshs.348,393,601 on compensation of employees.
However, review of the IPPD ledgers, bank remittances and manual payroll showed that
four (4) employees were in the payroll but not in master data (complement file) resulting
to irregular payment of Kshs.2,666,432. Similarly, sixty-three (63) employees were in both
the manual payroll and the IPPD payroll resulting to double payment of salaries
amounting to Kshs.14,166,755.
Further, fifty-three (53) staff members were overpaid by an amount of Kshs.402,864 when
compared with the amount processed in the payroll while seventy-nine (79) employees
were paid salary arrears more than once during the year amounting to Kshs.31,391,808.
In the circumstances, the accuracy and completeness and regularity of the amount of
Kshs.348,393,601 on compensation of employees could not be confirmed.
392. Unsupported Domestic Travel and Subsistence Payments
The statement of receipts and payments reflects an amount of Kshs.242,773,913 relating

to use of goods and services which, as disclosed in Note 4 to the financial statements
includes an amount of Kshs.104,474,047 on domestic travel and subsistence allowance.
Review of documents revealed that an amount of Kshs.643,000 was paid to a supplier
for provision of catering services to an adhoc committee. However, no program was
provided to indicate the date, authority and the type of activities that the committees were
engaged in. Further, expenditure totalling Kshs.1,715,500 was charged to domestic travel
and subsistence allowance instead of the hospitality expenses.
In addition, an amount of Kshs.805,028 was paid to a service provider for flight services
to Seychelles. However, this payment was charged to domestic travel and subsistence
allowance instead of foreign travel and subsistence payment. Further, the supplier invoice
was not provided for audit review and the payment did not indicate the name of the officer
who travelled and the purpose of the safari.
In the circumstances, the accuracy and completeness of an amount of Kshs.2,520,528

incurred under domestic travel and subsistence allowances could not be confirmed.
393. Irregular Payment of Daily Subsistence Allowances

to use of goods and services, which as disclosed in Note 4 to the financial statements
includes an amount of Kshs.104,474,047 on domestic travel and subsistence allowance.
151
This amount in turn includes an amount of Kshs.17,830,350 paid to nine (9) staff members
in respect to daily subsistence allowances. The amount was paid covering periods
ranging from 90 days to 150 days. The expenditure was incurred on activities that relate
to daily normal duties of the officers.
In the circumstances, the regularity and completeness of the domestic travel and
subsistence allowance amounting to Kshs.17,830,350 could not be confirmed.
394. Unsupported Insurance Costs

The statement of receipts and payments reflects Kshs.242,773,913 in respect to use of
goods and services which, as disclosed in Note 4 to the financial statements includes
insurance costs of Kshs.29,874,366. This amount in turn includes Kshs.2,559,287 paid
for motor vehicle insurance by documentary evidence of the payments to the insurance
companies. Instead the payments were made to insurance brokers contrary to Section
156(2) of the Insurance Act, 2020 which provides that an intermediary shall not receive
any premiums on behalf of an insurer.
In the circumstances, the accuracy and completeness of insurance costs could not be
confirmed.
395. Unsupported Transfers to Other Government Entities

to transfers to other government entities, which as disclosed in Note 5 to the financial
statements relates to refunds to County Treasury for amounts borrowed by the County
Assembly. However, review of the financial statements of the Receiver of Revenue,
County Revenue Fund and the County Executive did not indicate any such transfers.
Further, the payment vouchers were not supported with specific details of expenditure.
In the circumstances, the accuracy and completeness of the transfers to other

government entities amounting to Kshs.17,187,955 could not be confirmed.
396. Unsupported Cash and Bank Balances
The statement of financial assets and liabilities and as disclosed in Note 9A to the financial
statements reflects bank balances of Kshs.296,876 from five (5) bank accounts held by
the County Assembly of Vihiga. However, no Board of Survey reports were provided in
support of bank balances from two bank accounts held at Co-operative bank which
reported a balance of Kshs.2,190 and one held at Kenya Commercial Bank reported a
balance of Kshs.223.
In the circumstances, the accuracy of cash and bank balances of Kshs.296,876 could not
be confirmed.
397. Unsupported Imprest and Salary Advances
statements reflects an amount of Kshs.389,664 in respect to imprests and advances. This
amount indicates a decrease by Kshs.2,452,436 from the closing balance of
152
Kshs.2,842,100 in 2021/2022. However, no surrender vouchers, schedule of recoveries,
imprest register and salary advances register were provided for audit to support the
movements.
Further, included in the amount of Kshs.389,664 is a balance of Kshs.180,041 described

as government imprest issued as imprests to staff. However, the supporting schedule
reflects imprests amounting to Kshs.700,000 which were issued to four (4) staff members
between May and June, 2023 resulting to a variance of Kshs.519,959 which has not been
explained or reconciled.
In the circumstances, the accuracy and completeness of imprests and advances balance
of Kshs.389,664 could not be confirmed.
398. Unsupported Contingent Liabilities
Note 5 to the financial statements under other disclosures reflects contingent liabilities
balance of Kshs.2,797,250, which is a decrease of Kshs.8,856,569 from the previous
year’s balance of Kshs.11,653,819. However, Management did not provide any
documentation to support the decrease in contingent liabilities.
In the circumstances, the accuracy and completeness of the contingent liabilities balance
Emphasis of Matter
399. Pending Payables
Note 2 in respect to Other Disclosures to the financial statements reflects other pending
payables balance of Kshs.76,080,065 which includes a balance of Kshs.72,918,081 in
respect to a debt owed to Vihiga County Assembly Members and Staff Mortgage and Car
Loans Scheme Fund as at 30 June, 2022. This debt has been outstanding for a long
period and during the year under review, only a minimal repayment of Kshs.3,000,000
was made.
have to be charged.
Other Matter
153
explanation for failure to do so, as part of the contents provided for in the reporting format
prescribed by the Public Sector Accounting Standards Board.

RESOURCES
Basis for conclusion
401. Irregularities in the Construction of the Speaker’s Residence
Review of project status report as at 30 June, 2023 for the proposed Speaker’s residence
indicated that Vihiga County Assembly had spent Kshs.34,493,609 on construction of
Speaker’s Residence. However, review of records indicates that the County Assembly
separately contracted a firm at a contract sum of Kshs.19,786,352 to undertake the
proposed erection of boundary wall, landscaping and paving at Speakers residence to
which an amount of Kshs.15,743,473 had been paid by the time of audit in September,
2023. By the time of audit in September, 2023, the County Assembly had spent a total
of Kshs.50,237,082 contrary to the Salaries and Remuneration Commission Circular Ref.
No. SRC/TS/COG/6/61/48 VOL.II (64) of 20 May, 2019 which provided a ceiling of
Kshs.35 million for the construction of the County Speaker’s residence.
Further, the land on which the Speaker’s residence stand is 1.15 hectare or 2.87 acres.
This contravened the acreage limit of up to 1 acre stated in the Salaries and
Remuneration Commission Circular.
In addition, the land on which the Speaker’s residence is built indicates that it was
purchased from a private owner at Kshs.10,000,000. This was contrary to the Salaries
and Remuneration Commission Circular which stated that Counties should construct the
houses on public land owned by the County.
402. Irregular Use of Imprest on Procurement of Goods and Services
Review of records provided revealed that Management contracted a service provider to

supply tea and snacks for the one hundred and fifty (150) staff at a contract sum of
Kshs.3,600,000. However, the payment for the services was made through imprests
issued to a member of staff instead of paying directly to the service provider. This was
Regulations, 2015 provides that temporary imprests shall be issued mainly in respect of
official journeys and are intended to provide officers with funds with which they can meet
travelling, accommodation and incidental expenses.
403. Irregular Subscription to the Payments
Review of expenditure records revealed that Management paid a total of Kshs.5,000,000

to Country Assemblies Forum (CAF) and Kshs.750,000 to the Society of Clerks
154
(SOCATT) contrary to Section 37(b) of the Inter-governmental Relations Act, 2 of 2012
which requires operational expenses in respect of the structures and institutions
established under the Act to be provided for in the annual estimates of the revenue and
expenditure of the National Government.
404. Delay in Completion of Proposed Boundary Wall, Landscaping and Paving

at Speaker’s Residence
The proposed erection of boundary wall, landscaping and paving at Speaker’s residence
was awarded to a construction company at a contract sum of Kshs.19,786,352 with the
commencement and completion dates of 29 September, 2022 and 30 June, 2023
respectively. Review of the project’s technical status report as at 30 June, 2023 indicated
that the project was at 80% completion. Further, Management did not provide inspection
and acceptance reports to authenticate works done vide interim certificate payment No.2
for Kshs.6,233,144.
In the circumstances, the value for money on the funds incurred on the project could not
be confirmed.
405. Irregularities in Legal Expenses
Review of documents provided revealed that the County Assembly awarded a contract to
a local firm for the proposed design and architectural works at Vihiga County Assembly
Headquarters and renovation of office block on 15 April, 2014. However, a dispute arose
between the contractor and the client which was subjected to an arbitration and ruled by
the High Court of Kenya. Later the case was taken to the Court of Appeal and the court
ordered Vihiga County Assembly to deposit a decretal sum of Kshs.31,653,818 in an
interest earning joint account at any branch of Cooperative Bank of Kenya Ltd. During the
year 2021/2022, the County Assembly deposited Kshs.20,000,000 in the joint account.
However, the contract agreement was not provided for audit review.
Although the County Assembly had paid the contractor an amount of Kshs.29,856,539 as
at the time of audit in November, 2023 as ordered by the court, no evidence of works
done was provided for audit review. The court ordered that the decretal sum be deposited
into a joint bank account. However, Management did not provide minutes for opening the
bank account together with bank statements up to 30 June, 2023 (except for the period
March, 2021 to September, 2022) hence, transactions into and out of the bank account
could not be verified. The joint bank account at Cooperative Bank of Kenya - (Nairobi
Business Centre Branch) was in the name of Patrick Luta and Francis Otieno and not
Vihiga County Assembly. The said bank account was an interest earning account.
However, the amount of interest earned and how it was accounted for was not provided
for audit review. The financial statements indicated that the fixed deposit earned an
interest amount of Kshs.336,539 during the year under review, and that the deposit was
lifted and all the amounts were credited to the County’s books where the amount was
recognized as miscellaneous income in the year. However, no record of how the amounts
were transferred from the account holders to the County Assembly was provided for audit
review.
155
In the circumstances, the propriety of the legal expenses could not be confirmed.
During the year ended 30 June, 2023, eight (8) employees earned a net salary of less
than a third (1/3) of the basic salary contrary to Section C.1(3) of the Public Service
Commission (PSC) Human Resource Policies, 2016. The Management has not explained
the failure to comply with the policy.
In the circumstances, Management contravened the Human Resource Policies.
407. Incomplete Procurement Plan
Review of the procurement plan for the year 2022/2023 revealed that the plan did not
have a schedule of the planned delivery, implementation or completion dates of all goods,
works or services contrary to Regulation 41(b) of the Public Procurement and Asset
Disposal Regulations, 2020. The plan did not indicate whether some procurements were
to be procured within a single year period or under a multi-year period contrary to
Regulation 41(c) of the Public Procurement and Asset Disposal Regulations, 2020.
Further, there was no indication whether any items may be aggregated for procurement
as a single package or for procurement through any applicable arrangement for common
user items.
In addition, the annual procurement plan was not done in accordance with the format
specified in the Third Schedule contrary to Regulation 42 of the Public Procurement and
Asset Disposal Regulations, 2020.
Review of records revealed that the total number of employees of the County Assembly
was two hundred and thirty-nine (239) out of which two hundred and twenty-seven (227)
or 95 % of the total number were members of the dominant ethnic community in the
County. This was contrary to Section 7(1) and (2) of the National Cohesion and Integration
Act, 2008 which states that, all public offices shall seek to represent the diversity of the
people of Kenya in the employment of staff and that no public institution shall have more
than one-third of its staff establishment from the same ethnic community.
156
AND GOVERNANCE
409. Ineffective Audit Committee
Review of documents revealed that the Audit Committee charter was only a draft which
had not been approved and that the Audit Committee only met once to approve the
internal audit work plan contrary to Regulation 172(1) of the Public Financial Management
(County Governments) Regulations, 2015 which states that the Audit Committee shall
meet at least once in every three months. Further, the quarterly report of Internal Audit
was prepared for the audited Departments. However, a response and action plan from
the Clerk of the County Assembly to the chairperson of the Audit Committee on the
recommendations were not provided for audit review.
In the circumstances, the effectiveness of the internal audit function could not be
confirmed.
410. Non-Implementation of the Recommendations of Oversight Bodies
During the year under review, Management did not provide reports on Implementation of
the Recommendations of Legislative Oversight Committees contrary to Section 31(1)(a)
of the Public Audit Act, 2015. Further, the Senate County Public Accounts Committee
recommended an investigation to be carried out by the Ethics and Anti-Corruption
Commission for failure by the County Assembly’s Management to implement
recommendations of the Senate’s County Public Accounts Committee and the County
Assembly’s Public Accounts and Investments Committee recommendations and also
failure to follow up on the reports of the Auditor-General.
In the circumstances, Management’s determination in improving the governance and

management of the County Assembly was doubtful.
157
COUNTY ASSEMBLY OF BUNGOMA – NO.39
Unqualified Opinion
Emphasis of Matter
412. Pending Bills
Note 1 and 3 in Other Disclosures reflects a balance of Kshs.34,746,187 and

Kshs.91,160,014 in respect of pending accounts payable and other pending payables
respectively all totalling Kshs.125,906,201 which were not settled as at
30 June, 2023 but were carried forward to 2023/2024 financial year. No plausible
explanation was provided for non-payment of the pending bills before the end of the
financial year.
Failure to settle pending bills in the year they relate distorts the financial statements and
adversely affects the budgetary provision for the subsequent year as they form a first
charge.
My opinion is not modified in respect to this matter.

RESOURCES
Review of the County Assembly’s staff records for the month of June, 2023 indicated that
out of the one hundred and twenty-five (125) permanent employees, one hundred and
ten (110) or 88% were from the same ethnic community contrary to Section 7(2) of the
National Cohesion and Integration Act, 2008 which provides that no public entity shall
have more than one-third of its staff from the same ethnic community.
414. Non-Compliance with One-third Basic Salary Pay Rule
Review of the payroll revealed that employees’ salary deductions exceeded two- thirds
(2/3) of their basic salary contrary to Section C.1(3) of the Public Service Commission
Human Resource Policies, 2016 and Section 19(3) of the Employment Act, 2007 which
require that deductions made by an employer from the wages of his employees at any
one time shall not exceed two-thirds of such wages.
158

AND GOVERNANCE
415. Poor Information Communication Technology (ICT) Control Environment
Review of documents provided for audit and physical verification revealed that the server
room doors were being opened inwards contrary to the requirements of Section 8.0.2(a)
of Government ICT Networks Standards ICTA.2.002:2019 that requires doors of the
telecommunication/equipment room to open outward, slide sideways, or be removable.
In the circumstances, the internal controls were not up to the standards required for a
Government entity.
159
COUNTY ASSEMBLY OF BUSIA – NO.40

416. Unauthorized Transfers to Other Government Entity
The statement of receipts and payments reflects transfers to other Government entities
amount of Kshs.108,000,000 and as disclosed in Note 4 to the financial statements,
relates to transfers to the Car Loan Scheme Fund. However, the amount exceeded the
budgeted amount of Kshs.100,600,000 by an amount of Kshs.7,400,000. This was
contrary to Section 36(4) of the Public Finance Management (County Governments)
Regulations, 2015, which states that funds withdrawn from the County Revenue Fund
under this regulation may be utilized only for services for which funds have been provided
for in the budget estimates.
In the circumstances, the regularity of expenditure of Kshs.7,400,000 could not be

confirmed.
Emphasis of Matter
417. Unsupported Pending Bills
Notes 1 and 2 under Other Important Disclosures in the financial statements reflects
pending accounts payable and pending staff payables balance of Kshs.38,445,225 and
Kshs.112,228,941 respectively, totalling Kshs.150,674,166.
Failure to settle bills in the year to which they relate adversely affects the budgetary
provisions of the subsequent financial years to which they have to be charged.

RESOURCES
During the year under review, the County Assembly had a total of one hundred and
twenty-seven (127) employees. Out of this, eighty-eight (88) employees or 69%, were
from the dominant ethnic community. This was contrary to Section 7(1) and (2) of the
National Cohesion and Integration Act, 2008 which states that all public offices shall seek
to represent the diversity of people of Kenya in employment of staff and that no public
establishment shall have more than one third of its staff from the same ethnic community.
160
AND GOVERNANCE
419. Inadequate Internal Audit Functions
419.1 Lack of Internal Audit Reports
During the year under review, the County Assembly did not provide any internal audit
reports, which would have given assurance on effectiveness of internal controls, overall
governance, risk assessment and operations and activities of the County Assembly.
Further the internal audit unit operated without an approved annual work plan.
419.2 Failure to Hold Quarterly Meetings
During the year under review, the Audit Committee held only one (1) meeting. This was
Regulations, 2015, which stipulates that the audit committee should meet at least
quarterly including one to review the financial statements before they are submitted to
external auditors and one to meet with the external auditors.
In the circumstances, the existence of an effective internal controls, risk management and
governance systems in place during the year under review could not be confirmed.
420. IT Internal Control Weaknesses
During the year under review, the County Assembly did not have an IT Steering
Committee and IT Security Policy to ensure data confidentiality, integrity and availability.
Further, the County Assembly did not have anti-virus and firewall programs on all
computers. In addition, the County Assembly did not also have a policy on physical
access to IT infrastructure and did not also maintain a risk register.
In the circumstances, the effectiveness of the County Assembly’s IT internal controls

161
COUNTY ASSEMBLY OF SIAYA – NO.41

421. Misclassification of Expenditure

respect to compensation of employees which, as disclosed in Note 3 to the financial
statements include basic wages of temporary employees totalling Kshs.36,255,902.
However, examination of the payments revealed that expenditure amounting to
Kshs.6,318,000 for Ward offices and general office operations was erroneously charged
to basic wages of temporary employees.
In the circumstances, the accuracy and completeness of basic wages of temporary

employees of Kshs.36,255,902 for the year ended 30 June, 2023 could not be confirmed.
422. Unsupported Expenditure on Use of Goods and Services

statements includes an amount of Kshs.113,716,769 under domestic travel and
subsistence allowance. Included in the expenditure of Kshs.113,716,769 is an amount of
Kshs.1,663,900 indicated as daily subsistence allowance to the County Assembly of
Siaya. Management has explained that this amount was paid to Committee Members with
no Integrated Financial Management Information System (IFMIS) numbers. However, out
of Kshs.1,663,900, an amount of Kshs.770,500 has not been supported.
In the circumstances, the completeness and accuracy of the expenditure on domestic

travel and subsistence allowance amounting to Kshs.770,500 could not be confirmed.

statements includes an amount of Kshs.66,525,460 under training expenses. However,
review of records provided for audit revealed that included in the expenditure of
Kshs.66,525,460 is an amount of Kshs.60,209,610 indicated as daily accommodation
allowances paid to members of staff. No evidence was provided to indicate the kind of
training and where the beneficiaries of the training attended.
Further, included in the amount of Kshs.60,209,610 is an amount of Kshs.596,400 said

to have been paid as accommodation allowances to Siaya County Assembly without
disclosing the actual beneficiary.
162
In the circumstances, the accuracy, completeness and propriety of the expenditure on
training amounting to Kshs.66,525,460 could not be confirmed.
Emphasis of Matter
and actual amount on comparable basis of Kshs.1,320,157,632 and Kshs.1,041,741,656
respectively resulting in under-funding of Kshs.278,415,976 or 21% of the budget.
Similarly, the County Assembly spent Kshs.1,042,535,007 against an approved budget
of Kshs.1,320,157,632 resulting in an under-expenditure of Kshs.277,622,625 or 21% of
the budget.
The under-funding and under-performance affected the planned activities and may have

RESOURCES
425. Delayed Project Implementation
A contract for drilling and equipping of boreholes and construction of water kiosks in
twenty-eight (28) ward offices was awarded on 15 October, 2020 at a contract sum of
Kshs.117,133,552 for a duration of eight months ending 10 July, 2021. However, on 21
January, 2022 the contract was extended to May, 2022. At the time of audit in November,
2023, the project was still incomplete after making total payments amounting to
Kshs.64,836,353.
In the circumstances, value for money may not have been received for Kshs.64,836,353
incurred on the project.
Analysis of personnel records revealed that the County Assembly had a total of eighty-
nine (89) members of staff out of whom seventy-seven (77) or 87% were from the
dominant community in the County. This was contrary to Section 7(2) of the National
Cohesion and Integration Act, 2008, which provides that; “all public offices shall seek to
represent the diversity of the people of Kenya in the employment of staff and that no
public institution shall have more than one-third of its staff from the same ethnic
community”.
163
427. Failure to Establish a County Assembly Fund
During the year under review, Management had not established a County Assembly
Fund. This was contrary to Section 34(1) of the County Assembly Services Act, 2017
which states that there is established for each county, a fund to be known as the County
Assembly Fund and that there shall be paid into the County Assembly Fund:-(a) any
grants, gifts, donations or bequests,(b) monies from investments of the board and such
fees imposed or levies administered by the board and; (c) such monies as may, in the
future be appropriated from Revenue Fund established for each county.
During the year under review, the County Assembly of Siaya made late remittances of
statutory deductions for the months of July, September and October, 2022. Pay As you
Earn (PAYE) and National Hospital Insurance Fund (NHIF) deductions for the month of
July, 2022 was remitted on 29 August, 2022, while National Social Security Fund (NSSF)
deductions for the month of September, 2022 was remitted on 23 March, 2023. In
addition, NSSF deductions for the month of October, 2022 was remitted on
29 December, 2022.
This was contrary to Section 19(4) of the Employment Act, 2007 which provides that an
employer who deducts an amount from an employee’s remuneration in accordance with
Subsection (1)(a), (g) and (h) shall pay the amount deducted in accordance with the time
period and other requirements specified in the law, agreement, court order or arbitration
as the case may be.
Analysis of the payroll data for the year ended 30 June, 2023, revealed that eight (8)
employees earned a net salary of less than a third (1/3) of the basic salary contrary to
Section C.1(3) of the Public Service Commission (PSC) Human Resource Policies, 2016.
This may expose the staff to pecuniary embarrassment.

AND GOVERNANCE
430. Lack of Data Backup System
Review of the systems in place at the County Assembly of Siaya revealed that there is no
evidence of data backup system for its data which could lead to loss of business
continuity.
164
In the circumstances, business continuity may be at risk in case of a disaster.
431. Salaries Paid Outside the Integrated Personnel and Payroll Database (IPPD)
System
The statement of receipts and payments reflects compensation of employees’ balance of

Kshs.285,846,283 as disclosed in Note 3 to the financial statements. The balance
includes basic wages of temporary employees totalling Kshs.36,255,902 out of which
Kshs.16,274,350 relates to salaries to Ward offices staff paid through manual payment
vouchers outside the Integrated Personnel and Payroll Database (IPPD) Management
System. This contravened The National Treasury Circular No.9/2017, which requires
personnel emoluments to be controlled in the public personnel database and supported
by IPPD.
In the circumstances, the effectiveness of internal controls on payroll management could

not be confirmed.
432. Incomplete Non-Current Assets Register
Annex 2 to the financial statements reflects a summary of fixed asset register with a
balance of Kshs.879,710,278 as at 30 June, 2023. However, the Assembly’s asset
register was incomplete and did not have information such as asset value, description,
serial number, tag number, make/model, suppliers name, original location, current
location and the officer responsible for each asset and asset condition. In addition,
physical verification of the asset additions during the year under review revealed that they
were not tagged to confirm their ownership by the County Assembly.
In the circumstances, the existence of an effective mechanism to safeguard the safety of

the assets could not be confirmed.
165
COUNTY ASSEMBLY OF KISUMU – NO.42

433. Unconfirmed Travel and Subsistence Allowance

respect to use of goods and services, which as disclosed in Note 3 to the financial
statements includes an amount of Kshs.125,386,629 incurred on domestic travel and
subsistence allowances. However, review of the expenditure revealed that an amount of
Kshs.9,705,000 was paid to four (4) members of staff as daily subsistence allowances.
The amount exceeded an average of Kshs.2,000,000 per year, an indication that the
members of staff were paid allowances for between 100 and 186 days a year, which
appear impractical considering that most of the work of the County Assembly is legislative
and concentrated in the County Assembly. In addition, an amount of Kshs.26,317,246
was paid to a travel agent and three (3) hotel companies. It is however, not clear how the
services of the hotels were procured.
Further, included in the amount for use of goods and services, is expenditure totalling
Kshs.19,198,416 incurred on foreign travel and subsistence allowance. However, there
were eighty-one (81) payments for overseas travel out of which, sixty-three (63) of the
travel occurred in the month of May. No explanation was provided for these unusual
transactions.
In the circumstances, the accuracy, completeness and regularity of the expenditure of

Kshs.55,220,662 on travel and subsistence allowance could not be confirmed.
434. Voided Transactions
The IFMIS report indicates that payments totalling one hundred and forty-seven (147)
transactions in IFMIS amounting to Kshs.132,077,994 were voided. However, supporting
documents such as the voided payment vouchers, request to void payments, the National
Treasury approval and Exchequer requisitions from the Controller of Budget (COB) were
not provided for audit. The voided transactions may have been irregularly processed to
pay transactions not approved by the Controller of Budget.
In the circumstances, the regularity of the voided transaction could not be confirmed.
Emphasis of Matter
435. Pending Bills
Annex 1 on Other Disclosures to the financial statements, reflects pending accounts

payable totalling Kshs.19,433,977 (2022: Kshs.19,890,469) as at 30 June, 2023.
166
Management has not explained why the bills were not settled during the year when they
occurred.
Failure to settle bills during the year to which they relate to distorts the financial

RESOURCES
436. Irregular Payment to County Assemblies Forum (CAF)

statements includes Kshs.56,085,019 spent on other operating expenses which further
includes Kshs.9,000,000 paid to County Assemblies Forum. However, This was contrary
to Section 37 of the Intergovernmental Relations Act, 2012 which states that the
operational expenses in respect of the structures and institutions established by the Act
shall be provided for in the annual estimates of the revenue and expenditure of the
National Government.
437. Non-Compliance with the One Third Rule on Salary Deductions
During the year ended 30 June, 2023, eight (8) employees earned a net salary of less
than a third (1/3) of the basic salary. This was contrary to Section D22(2) of the County
Public Service Human Resource Manual and Section 19(3) of the Employment Act, 2007
which requires that the total amount of deductions which may be made by an employer
from the wages of his employee at any one time shall not exceed two-thirds of the basic
pay. The Management has not given explanation for failure to comply with the law.
438. Non-Compliance with Guidelines on Acting Positions
Analysis of the IPPD payroll data revealed that one (1) officer has been in an acting
position for a period exceeding six (6) months contrary to Section C.14(1) of the Public
Service Commission Human Resource and Procedures Manual, 2016 which provides that
an officer may be appointed in an acting capacity, for a period of at least thirty days but
not exceeding a period of six (6) months.
167
AND GOVERNANCE
439. Failure to Adhere to Human Resource Requirements
Review of human resource records revealed that, the County Assembly Service Board
did not prepare Human Resource Plans and Annual Recruitment Plans contrary to
Policies No.10 and No.11 of the County Assembly Human Resource Policies and
Procedures Manual, 2018. In addition, review of the Kisumu County staff establishment
revealed that the County Assembly did not fill in twelve (12) vacant positions in the
approved establishment for various Departments.
In the circumstances, Management may not achieve the intended goals and objectives in
the strategic plans without the requisite number of staff.
440. Payment of Salaries Outside the Integrated Personnel and Payroll Database
(IPPD)
Review of the payroll records revealed that processing of the payroll was done through
the IPPD and manual systems resulting to salaries and allowances for twenty-two (22)
staff and three (3) Members of County Assembly (MCAs) being managed and processed
by use of MS Excel throughout the year under review. Further, all ward employees paid
outside IPPD had not obtained birth certificates, a document that is a pre-requisite for
registration of human resource in the Integrated Personnel and Payroll Database System
(IPPD).
In the circumstances, the existence of effective internal controls in payroll could not be
confirmed.
168
COUNTY ASSEMBLY OF HOMA BAY– NO.43


respect of use of goods and services as disclosed in Note 4 to the financial statements.
However, review of the expenditure records revealed the following anomalies:
441.1 Unsupported Foreign Travel
The balance includes foreign travel and subsistence amounting to Kshs.5,328,777 as

disclosed in Note 4 to the financial statements. However, the expenditure was not
supported by copies of visas, air tickets, boarding passes, and back to office reports.
Further, the amount includes Kshs.2,262,225 which was disbursed to seven (7) MCAs as
travel allowance while attending Lake Victoria Region Local Authority Co-operation
(LVRLAC) meeting at Mbarara City in Uganda from 10 April, 2023 to 15 April, 2023.
However, documents such as invitation, program of activity or agenda and signed
attendance list were not provided.
441.2 Unsupported Domestic Travel and Subsistence and Expenditure on

Committee Meetings
The use of goods and services expenditure includes domestic travel and subsistence
amounting to Kshs.214,265,794 as disclosed in Note 4 to the financial statements. The
amount includes Kshs.832,000 paid to sixteen (16) Members of County Assembly (MCAs)
as travel allowances to facilitate carrying out report writing exercise in Kisumu for the
Department of Lands, Housing, Physical Planning from 31 October, 2022 to
2 November, 2022. However, the expenditure was not supported by Speaker’s approval,
program activity or agenda and attendance list. Further, no documentary evidence in
support of tabling of the Lands, Housing, Physical Planning Committee report in the
County Assembly.
In the circumstances, the accuracy and completeness of amounting to Kshs.6,160,777

442. Unsupported Cash and Cash Equivalents
The statement of financial assets and liabilities reflects cash and cash equivalents
amounting to Kshs.13,211,822 as further disclosed in Note 10 to the financial statements.
Review of cashbooks, bank statements and bank reconciliation statements revealed that
the bank reconciliation statements for Central Bank of Kenya-Development Account and
Recurrent Account with balances of Kshs.18,150,327 and Kshs.15,150,217 respectively
as at 30 June, 2023 were not provided for audit. Further, review of the Central Bank of
169
Kenya (CBK) recurrent bank account statement revealed a transfer of Kshs.1,474,632
dated 31 March, 2023 to Equity Bank Operation that had not been recorded in the cash
book and therefore misstating the cash book balance.
Further, the bank reconciliation statement for a Commercial Bank Account reflects
payments in cash book not yet recorded in bank statement amounting to Kshs.2,063,437
made on 30 June, 2023. However, the supporting payment vouchers and a subsequent
bank statement were not provided for audit. Further, review of the Operation cash book
revealed receipts of Kshs.6,201,000 which could not be traced to the bank statement.
In addition, the County Assembly Service Board, according to the Board minutes dated
4 December, 2022 and with the approval of County Treasury on 21 December, 2022
resolved and opened a Salaries Account at Kenya Commercial Bank. This was contrary
to Regulation 82(b) of the Public Finance Management (County Governments)
Regulations, 2015, which requires all county government bank accounts to be opened at
the Central Bank of Kenya except for imprest bank accounts for petty cash.
In the circumstances the accuracy and completeness of the cash and cash equivalents
Emphasis of Matter
443. Long Outstanding Pending Bills
Other disclosures Note 1 to the financial statements reflects pending accounts payable
amounting to Kshs.84,561,418 as disclosed in Annex 1 to the financial statements which
were not settled in the year under review. Further, the amount includes Kshs.79,195,935
relating to 2022-2023 financial year. This was contrary to Regulation 41(2) of the Public
Finance Management (County Governments) Regulations, 2015 which states that debt
service payments shall be a first charge on the County Revenue Fund. Further, records
from the Kenya Revenue Authority indicate that the County Assembly of Homa Bay owed
the Authority Kshs.433,616,523.
Failure to settle bills during the year in which they relate distorts the financial statements
for the year adversely affects the provisions for the subsequent year to which they have
to be charged.
Other Matter
In the audit report of the previous year, nineteen (19) issues were raised under Report on
the financial Statements, Report on Lawfulness and Effectiveness in Use of Public
explanation for the delay in resolving the issues.
170
RESOURCES
Basis of Conclusion
445. Non-Compliance with the One Third Rule on Salary Deductions
Review of the payroll revealed that twenty-three (23) employees earned net salary of less
than a third of their respective basic salaries. This was contrary to Section 19(3) of the
Employment Act, 2007, which states that the total amount of deductions from the wages
of an employee shall not exceed two thirds (2/3) of such wages.
Kshs.385,865,889 as disclosed in Note 4 to the financial statements. Review of records
revealed the following:
446.1 Irregular Expenditure on Domestic Travel and Subsistence
The use of goods and services expenditure includes domestic travel and subsistence
amounting to Kshs.214,265,794 as disclosed in Note 4 to the financial statements. The
amount includes Kshs.12,065,206 paid to staff, Members of the County Assembly (MCAs)
and Members of the County Assembly Service Board (MCASB) to enable them attend an
induction workshop in Mombasa. This was contrary to National Treasury, Circular
No.20/2015 of November, 2015, which require all accounting officers to hold all
workshops and retreats within the precincts of the duty station where most of the
participant’s work.
In the circumstances, value for money on the expenditure of Kshs.12,065,207 could not
be confirmed, and Management was in breach of the law.
446.2 Irregular Expenditure on Team Building
The use of goods and services expenditure includes hospitality supplies and services
amount of Kshs.29,780,538 as disclosed in Note 4 to the financial statements. The
amount includes Kshs.4,900,000 expenditure incurred on team building exercise in
Kisumu City. This was contrary to the Treasury Circular No.20/2015 of
4 November, 2015 which require all accounting officers to hold all workshops and retreats
within the precincts of the duty station where the majority of participant’s work.
In the circumstances, Management was in breach of the law and value for money on the
171
447. Other Payments
447.1 Avoidable Expenditure on Tax Penalties
The statement of receipts and payments reflects other payments amounting to

Kshs.62,720,792 as further disclosed in Note 9 to the financial statements. The amount
includes KRA Agenda Notices totalling Kshs.46,526,162 in respect of penalties payable
to Kenya Revenue Authority for non-remittances of Pay-As-You–Earn (PAYE) and other
taxes. However, Management did not provide a plausible explanation for the delayed
deductions and remittances of statutory obligations resulting in the avoidable penalties
totalling Kshs.46,526,162.
In the circumstances, Management did not obtain value for money on the penalties on
the statutory dues.
447.2 Irregular Payment to Society of Clerks-at-the Table in Kenya

(SOCATT (K))
The other payments expenditure includes subscriptions totalling Kshs.500,000 in respect

of payment to Society of Clerks-at-the-Table in Kenya (SOCATT(K)) as disclosed in Note
9 to the financial statements. This was contrary to Section 37 of the Intergovernmental
Relations Act, 2012 which requires operational expenses of the institution established
under the Act to be required by the National Government.
448. Stalled Construction of Automated Gate House at Homa Bay County

Assembly
The County Assembly Service Board entered into a contract for the construction of an
automated gate house at Homa Bay County Assembly at a contract sum of
Kshs.7,112,260 for a contract period of one (1) month ending on 21 June, 2020. The
contractor had been paid Kshs.4,000,000 as at 30 June, 2022. An audit inspection of the
project on 22 November, 2023 revealed that windows and glazing, doors, internal finishes,
external finishes, electrical installations and joinery fittings had not been completed.
Further, the contractor was not on site.
In the circumstances, value for money on the construction could not be confirmed.
449. Stalled Construction of Homa Bay County Assembly Office Block
The County Assembly Service Board contracted a company on 10 July, 2019 for the
construction of an office block at a contract sum of Kshs.348,927,840. The work which
was expected to be completed by 8 January, 2021 was later extended to 8 April, 2022.
Review of records revealed that the contractor had been paid a total of Kshs.66,714,925.
However, physical inspection of the project on 22 November, 2023 and review of records
in respect of the project revealed that the work on the project had been completed over
172
one year after completion date substructure. Further, the contractor was not on site and
no work was ongoing at the site.
In the circumstances, value for money on the construction could not be confirmed.

AND GOVERNANCE
450. Weak Controls Over Inventory Management
Review of store records revealed that the County Assembly did not conduct quarterly and
annual stock takes for the financial year 2022/2023. In addition, there were no
mechanisms put in place to track inventory items at issuance and at handover date by
various users who had left the County Assembly.
In the circumstances, the effectiveness of internal controls over inventory management

451. Fixed Asset Balance
Annex 2 to the financial statement reflects summary of non-current asset register

historical cost totalling Kshs.230,791,150. However, the amount was not supported with
an updated asset register.
In the circumstances, the existence of a mechanism to safeguard public resources could

not be confirmed.
173
COUNTY ASSEMBLY OF MIGORI – NO.44
452.1 Payment of Salaries Outside Integrated Personnel and Payroll Database

(IPPD)
The statement of receipts and payments reflects compensation of employees’ payments

of Kshs.364,806,447 and as disclosed in Note 3 to the financial statements, which
includes salaries amounting to Kshs.99,590,427 paid to two hundred and fifteen (215)
employees outside the Integrated Personnel and Payroll Database (IPPD) system.
However, Management did not provide a satisfactory explanation for failure to pay the
concerned officers through the IPPD. The use of the manual system requires manual
calculation of deductions, net pay and constant monthly and/or annual updates of the
data manually which is prone to error or manipulations.
In the circumstances, the accuracy, completeness and propriety of the expenditure of
453. Unsupported Use of Goods and Services
Kshs.394,180,140 as disclosed in Note 4 to the financial statements. However, audit of
this expenditure revealed the following unsatisfactory matters:
453.1 Utilities, Supplies and Services
The balance includes utilities, supplies and services amount of Kshs.4,944,978 out of
which an amount of Kshs.3,518,193 was not supported by complete payment voucher.
453.2 Domestic Travel and Subsistence
Further, the balance includes domestic travel and subsistence amount of

Kshs.233,007,662. However, the latter amount differs with Kshs.232,626,017 reflected
in the supporting ledger, resulting in a variance of Kshs.381,645 which has not been
explained or reconciled. Examination of sampled payment vouchers in respect to
domestic travel and subsistence allowance amounting to Kshs.96,494,235 revealed that
the vouchers lacked key supporting documents such as approvals, imprest warrants,
evidence of travel and back to office reports.
453.3 Foreign Travel
In addition, the balance includes foreign travel and subsistence amount of

Kshs.21,218,901 out of which an amount of Kshs.1,650,388 was paid to four officers to
attend a five (5) day conference in Ethiopia between 26 and 30 April, 2023. However,
copies of visa for the return journey, boarding passes, back to office reports, the
174
approved rates of payment and a computation of the amount payable to each individual
were not provided for audit, casting doubt on how the amounts paid were arrived at.
The foreign travel and subsistence amount of Kshs.21,218,901 also includes
Kshs.3,882,331 which, according to the documents provided for audit was paid to
members in respect of Lake Victoria Region Local Authorities Cooperation (LVRLACC)
Annual General Assembly held in Mbarara City in Uganda between 10 and 15 April,
2023. However, evidence of travel such as boarding passes for each participant, and
approved rates of payment and workings for the specified amounts paid to each
participant were not provided for audit.
Further, the foreign travel and subsistence amount of Kshs.21,218,901 includes the
payments amounting to Kshs.3,262,835 whose respective payment vouchers and
relevant supporting documentation, including approved rates of payment, computation
of amount payable to each individual, invitation to the activity, boarding passes, return
visa and back to office reports were however not provided for audit.
453.4 Training Expenses Travel
The balance also includes training expenses amount of Kshs.6,545,800 out of which an
amount of Kshs.6,124,482 was not supported by approvals, imprest warrants and
evidence of travel. Further, Management did not provide imprest records in respect to
cash advanced to the beneficiaries and the surrender documentation on the same,
casting doubt on how the amount was advanced and accounted for.
In addition, expenditure on air ticketing services was not supported by requisition from
user departments, procurement records such as original bid documents, evaluation of
bids, appointments to evaluation committee, minutes, award, and notification to the
successful service provider and contract documents. Further, there was no evidence
that local purchase orders (L.P.O) were raised.
453.5 Office and General Supplies and Services
The balance includes office and general supplies and services amounts of
Kshs.8,929,855 out of which amount of Kshs.5,361,170 was not supported by payment
vouchers and other related documents.
In the circumstances, accuracy, completeness and propriety of the expenditure of

453.6 Other Operating Expenses
The amount of Kshs.394,180,140 also includes other operating expenditure of

Kshs.50,634,695, However, supporting ledgers/schedules reflects an amount of
Kshs.48,883,320, resulting to unexplained/unreconciled variance of Kshs.1,751,375.
Further, the amount of Kshs.50,634,695 differs with total payments of Kshs.22,917,213
reflected in the payment vouchers provided for audit, resulting in a variance of
Kshs.27,717,482 whose payment vouchers were not provided for audit. In addition, the
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amount of Kshs.50,634,695 includes an amount of Kshs.7,729,696 whose payment
vouchers did not have any supporting documents.
Further, operating expenditure amount of Kshs.50,634,695 includes legal expenses of
Kshs.16,691,052 whose supporting documents such as appointments of four (4) legal
firms were not provided for audit. Further, evidence of the procurement process leading
to the selection of the four (4) law firms have not been provided for audit.
453.7 Routine Maintenance
The amount of Kshs.394,180,140 includes routine maintenance-other assets amount of

Kshs.9,132,139 out of which amount of Kshs.5,756,059 relates to maintenance of plant,
equipment, buildings and stations. However, payment vouchers, local service orders
(L.S.O), invoices, counter receipt vouchers (Form S13), delivery notes, inspections and
acceptance reports in support of the latter amount were not provided for audit.
Further, the balance of Kshs.9,132,139 includes expenditure on accessories for ICT
equipment and repair of computers amounting to Kshs.1,358,110 whose supporting
procurement documentations such as local purchase order, delivery note, invoices,
counter receipt voucher (Form S13), counter requisition and issue voucher (Form S11)
In the circumstances, accuracy, completeness and propriety of the expenditure
amounting to Kshs.394,180,140 in respect of use of goods and services could not be
confirmed.
454. Unsupported Procurement of Assets

Management did not provide procurement documentations like advertisement,
evaluation reports, award notifications, acceptance letters, contracts, payment
certificates, LPOs and invoices to support the amount.
Further, the amount includes expenditure on purchase of ICT equipment amounting to
Kshs.1,752,758 which further includes an amount of Kshs.1,358,110 whose supporting
procurement documentations such as local purchase order, delivery note, invoices,
counter receipt voucher (Form S13), counter requisition and issue voucher (Form S11)
were not provided for audit.
In the circumstances, accuracy, completeness and propriety of the expenditure of
455. Unsupported Cash and Cash Equivalent
The statement of financial assets and liabilities and as disclosed in Note 8 to the
financial statements reflects cash and cash equivalents balance of Kshs.1,810.
However, review of the cash books, bank statements, bank reconciliation statements
and bank balance certificates revealed that the financial statements reflects a Kshs.Nil
176
balance for the CBK Migori County Assembly recurrent account, while the cash book
and certificate of bank balance show balances of Kshs.390,686 and Kshs.35,230,913
respectively. However, bank reconciliation statements for July, 2022 to June, 2023 were
not provided for audit to support the Kshs.Nil balance.
Further, reflects a Kshs.Nil balance for the CBK Migori County Assembly development
account, while both the cash book and certificate of bank balance show a balance
Kshs.404,658, resulting in an unreconciled variance of Kshs.404,658 whose bank
reconciliation was provided for audit review.
In addition, the Board of surveys were not provided; for CBK Migori County Assembly
recurrent account, CBK Migori County Assembly development account and KCB
operations account to support the cash book end year closing balances.
In the circumstances, accuracy of the cash and cash equivalents balance of Kshs.1,810
as at 30 June, 2023 could not be confirmed.
456. Misclassification of Cost of Work Not Yet Done as Pending Bill
Note 1 under Other Disclosures to the financial statements reflects pending accounts
payable balance carried forward amount of Kshs.106,159,756 which includes an amount
of Kshs.15,596,365 in respect of a contract for supply, installation, configuring, testing,
commissioning, customizing and administering an ERP system. The project was at a
contract sum of Kshs.36,894,960, inclusive of user training cost and at a contract period
of one year starting on 27 April, 2022 and ending on 26 April, 2023. As at the time of
the audit (August, 2023), contractor had done 75% of the work in that the software had
not been fully developed and had not been installed. The contract period had expired
and there was no evidence of extension of period. Further, cumulative payments of
Kshs.21,298,594 had been made to the contractor as at 3 May, 2023. This amount had
fully covered the works done and, therefore, there was no pending bill.
In the circumstances, the accuracy of the pending accounts payable balance
457. Unsupported Voided Payments
Review of the Integrated Financial Management Information System (IFMIS) payments

data revealed that 70 transactions of amount of Kshs.57,919,195 were voided during the
year 2022/2023 despite having been approved by the Controller of Budget. Management
has not provided reasons for voiding these payments and its current status.
In the circumstances, the status of the voided transactions could not be confirmed.
Emphasis of Matter
458. Long Outstanding Accounts Payable
Note 1 under Other Important Disclosures to the financial statements on pending

accounts payable, reflects balance carried forward of Kshs.106,159,756 which has been
outstanding for more than twelve months. No explanation has been provided for delayed
settlement of these long outstanding bills.
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In the circumstances, County Assembly risks being sued by suppliers, which may lead to
the incurring additional legal costs and penalties and interests on late payments.
459. Non-disclosure of Kenya Revenue Authority (KRA) Debt
Records reviewed showed that the County Assembly of Migori owed the Kenya Revenue
Authority an amount of Kshs.323,559,210. However, Management did not disclose this
debt as pending accounts payable.
In the circumstances, accuracy and completeness of the pending account payable
Other Matter
Governance. However, Management had not resolved the issues as at 30 June, 2023.

RESOURCES
statements reflects amount of Kshs.364,806,447 in respect of compensation of
employees. However, the following anomalies were noted:
462. Non-compliance with a Third of Basic Pay Rule
An analysis of the County Assembly’s payroll for the month of June, 2023 revealed that
twenty-one (21) employees’ net pays were below a third of their respective basic salaries,
contrary to Section 19(3) of the Employment Act, 2007 which states that the total amount
of deductions from the wages of an employee shall not exceed two thirds (2/3) of such
wages.
463. Irregular Payment of County Assembly Service Board Committee

Allowances

respect of compensation to employees which includes amount of Kshs.10,384,873 in
respect of one thousand and thirty-eight (1,038) committee meetings. However, an
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amount of Kshs.1,851,744 was paid to four (4) Committee members in excess of the
maximum limit recommended in the SRC Circular Ref.SRC/TS/CGOVT/3/61/Vol. IV (49).
In the circumstances, the regularity of the expenditure of Kshs.1,851,744 could not be

confirmed.
Kshs.394,180,140 as disclosed in Note 4 to the financial statements. The following
unsatisfactory matters were noted:
464.1 Irregular Subscriptions to the County Assembly Forum (CAF)
The balance of Kshs.394,180,140 includes operating expenses amount of

Kshs.50,634,695 out of which, an amount of Kshs.1,000,000 was paid as a subscription
fee to the County Assembly Forum. However, the law requiring the payment was not
provided for audit.
In the circumstances, regularity of the expenditure of Kshs.1,000,000 could not be

confirmed.
464.2 Non-Compliance with Laws on Imprest Management
The amount of Kshs.394,180,140 also includes domestic travel and subsistence, and
foreign travel and subsistence amounts of Kshs.233,007,662 and Kshs.21,218,901
respectively, totalling Kshs.254,226,563. However, examination of sampled payments
amounting to Kshs.104,875,348 revealed that the payments were not supported by
imprest warrants, and therefore the purpose of the imprest issued could not be confirmed.
This was contrary to Regulations 91(2) and 93(1) of the Public Finance Management
(County Governments) Regulations, 2015, which require formal application of imprest
through an imprest warrant, and that imprest shall be issued for a specific purpose as
stated on the imprest warrant. Further, Management did not maintain an imprest register
as required by Regulation 93(4) of the Public Finance Management (County
In the circumstances, Management was in breach of the law and the regularity of the
464.3 Avoidable Legal Fees
Kshs.394,180,140 which, as disclosed in Note 4 to the financial statements, includes
other operating expenses amount of Kshs.50,634,695 out of which, Kshs.16,691,052 was
spent on legal fees. However, the following anomalies were noted:
i. The County Assembly was given a fee note for Kshs.2,040,000, being legal fees
relating to a case where one of the contestants in the election of the Speaker of the
County Assembly petitioned the outcome of the election in the year 2017, claiming
that the standing order procedures in the election were violated. The Court ruled in
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favor of the petitioner. Had the standing order procedures been adhered to, there
would have been no petition and, therefore, the legal expenditure (fee note) of
Kshs.2,040,000 would have been avoided.
ii. A company that supplied the County Assembly with assorted goods worth
Kshs.6,759,400, sued the County Assembly for failure to pay for the supplies. The
court ordered the County Assembly to pay the debt and the supplier’s advocate gave
the County Assembly a fee note of Kshs.675,940, being debt collection fee. Had the
County Assembly paid for the goods, the supplier would not have taken the matter to
court and, therefore, the County Assembly would not have been required to pay the
fee of Kshs.675,940.
iii. A hotel sued the County Assembly, seeking to be paid for hospitality services rendered
to the County Assembly. The Court ruled in favour of the hotel and ordered the County
Assembly to pay the Hotel. As a result, the Assembly incurred a legal fee of
Kshs.257,735 which would have been avoided had the County Assembly paid for the
hospitality services in time.
In the circumstances, value for money incurred of Kshs.2,973,675 could not be confirmed.
465. Stalled Projects - Abandoned
Examination of project files and physical verification of projects conducted in

August, 2023 revealed that four (4) projects; one (1) started in the financial year
2014/2015 and three (3) in 2015/2016, were incomplete and had been abandoned.
However, an amount of Kshs.11,136,806 had been paid.
Management did not provide a satisfactory explanation on how the projects would
eventually be completed.
In the circumstances, value for money incurred of Kshs.11,136,806 could not be
confirmed.
AND GOVERNANCE
466. Lack of Approved Human Resource Instruments
During the year ended 30 June, 2023, Migori County Assembly Service Board failed to
formulate schemes of service setting out the terms and conditions for the appointment of
the officers and other staff to the Service, providing for (a) the appointment and
confirmation in appointment of officers and other staff; (b) promotions, resignations and
termination of appointments; (c) secondment of staff and transfer of service; (d) the scales
of salaries and allowances; and (e) the designation and grades of officers and other staff
as per Section 25(1) of the County Assembly Service Act, 2017. In addition, Migori County
Assembly does not have an approved staff establishment, as a result, Management failed
to develop a human resource plan indicating the optimal staffing levels and skills required.
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In the circumstances, it was not possible to confirm whether the County Assembly has an
optimal staffing level with the required skills.
467. Irregular Full Payment of Salaries to Employees with Disciplinary Cases
Review of documents provided for audit review revealed that during the year under
review, the County Assembly had two (2) employees on interdiction, pending
investigations and one employee on dismissal. The two employees while on interdiction
were to be paid half salary, full house allowances, medical allowances or where
applicable medical insurance premium remitted. However, as at the time of audit in July,
2023, the three (3) cases had not been concluded and the employees continued to
receive full salaries and allowances. Management has explained, without providing
evidence, that one of the interdicted staffs is on half salary and that the one on dismissal
went to court and got a reprieve on the status quo until the matter is determined and
concluded.
In the circumstances, effectiveness of internal controls on staff management could not be

confirmed.
468. Irregular Recruitment of Ward Employees
Review of documents provided for audit revealed that during the year under review,
Members of the County Assembly directly employed one hundred and seventy-seven
(177) ward staff without involving County Assembly Service Board, the body mandated
to recruit County Assembly staff in a process that is open, transparent, and fair. In
addition, the ward staff were hired without signed contract agreements detailing their
duties and functions.
In the circumstances, effectiveness of internal controls on recruitment of staff could not

be confirmed.
469. Failure to Carry Out Quarterly and Annual Stock Takes
Management did not provide quarterly, and annual stock take reports in respect of the
financial year ended 30 June, 2023. This was an indication that Management did not carry
out quarterly and annual stock takes of the County Assembly’s inventories. As a result,
there were no mechanisms put in place to track the inventory items at handover date by
various users contrary to Section 162(2) of Public Procurement and Asset Disposal Act,
2015 which states that the head of a procurement function shall arrange for occasional
visits or inspection to the stores, at least quarterly in each calendar year and conduct
quarterly and annual inventory and stock taking to ensure compliance with all respective
governing laws and submit the report to the accounting officer.
In the circumstances, effectiveness of stores procedures in safeguarding stocks could not

be confirmed.
470. Inadequate Staffing of Internal Audit Unit
During the year under review, the internal audit unit was staffed with only one officer
against the required three as prescribed in the departmental chart. In addition, the head
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of internal audit did not provide any audit report conducted on key departments of
procurement and finance during the year under review.
In the circumstances, the effectiveness of the internal audit function could not be
confirmed.
471. Failure to Maintain an Asset Register
As previously reported, Annex 3 to the financial statements reflects non-current assets

with a historical cost balance of Kshs.459,410,908. However, review of the assets records
revealed the following anomalies: -
i. Management did not maintain a fixed asset register in the prescribed format contrary
to Regulation 136(1) of the Public Finance Management (County Governments)
Regulation 2015. The asset register in place lacked identification or serial numbers,
acquisition date, description of the asset, location, class and cost of the acquisition. In
addition, the register of land did not have a recording of each parcel of land and the
terms on which it is held, with reference to conveyance, address, area, dates of
acquisition, disposal or major change in use, capital expenditure, leasehold terms,
maintenance contracts and other pertinent management details as required by
Regulations, 2015.
ii. Management had not taken over and or reported assets and liabilities inherited from
the defunct Local Authorities.
iii. Management had not yet established policies and procedures on asset management
as required by Part XII of Public Finance Management (County Governments)
Regulations 2015. In addition, the assets are not tagged or coded for ease of
identification or tracking.
iv. Fixed assets were not physically inspected on a regular basis to establish their
conditions.
In the circumstances, the existence and/or effectiveness of internal controls over

management of non-current assets could not be confirmed.
472. Lack of Risk Management Policy and Management Framework
As previously reported, review of the risk management framework revealed that the
County Assembly operated without an approved risk management policy for
management of risk and increase of overall awareness of risk throughout the County
Assembly.
In addition, there was no documentary evidence to confirm that the County Assembly
conducted a risk assessment to identify potential risk exposure, possibility of their
occurrence and their mitigating strategies, contrary to Regulation 158(1)(a) and (b) of
the Public Finance Management (County Governments) Regulations, 2015, which
provides that “an accounting officer of a County Government entity shall develop risk
182
management strategies, which include fraud prevention mechanism; and a system of
risk management and internal control that builds robust business operations”.
In the circumstances, the effectiveness of internal controls over management of risks

183
COUNTY ASSEMBLY OF KISII – NO.45
473. Unsupported Car Reimbursement to the Members of the County Assembly

Kshs.731,572,764 which, as disclosed in Note 4 to the financial statements, includes
personal allowances paid as part of salary amount of Kshs.319,990,156 out of which,
Kshs.154,840,000 was paid as car reimbursements to the Members of the County
Assembly (MCAs). However, review of the approved budget revealed that the allocation
did not indicate the item code while in the vote book, the expenditure was accounted for
under compensation of employees.
Further, the latter amount includes Kshs.145,992,000 of which, Management did not
provide supporting documents, including separate Forms A, schedule of the intended
beneficiaries, valuation and inspection reports, sale agreements, invoices, receipts and
log books to support the latter amount. Similarly, an amount of Kshs.8,848,000
reimbursed to four (4) MCAs was not supported with Forms A and ETR receipts.
In addition, review of records revealed that the County Assembly through a special sitting
requested for additional funds of Kshs.157,052,000 towards car purchase allowances in
the supplementary budget, against the Controller of Budget’s advice through a circular
that the expense be charged in the ensuing years.
In the circumstances, the accuracy, completeness and regularity of the car

reimbursement amount of Kshs.154,840,000 could not be confirmed.
Emphasis of Matter
The statement of comparison of budget and actual amounts: recurrent and development
reflects final budgeted receipts and actual on comparable basis amounts of
Kshs.1,509,980,447 and Kshs.1,316,794,471 respectively, resulting to underfunding of
Kshs.193,185,976 (or 13% of the budget). Similarly, the County Assembly spent
Kshs.1,312,588,623 against an approved expenditure budget of Kshs.1,509,980,447,
resulting in an under-expenditure of Kshs.197,391,824 (or 13% of the budget).
The underfunding and underperformance affected the planned services that may have
475. Pending Bills
Note 1 to the financial statements on pending accounts payable, under other disclosures,
reflects balance brought forward as at 1 July, 2022 of Kshs.28,136,619, addition for the
year of Kshs.32,524,182, paid during the year of Kshs.42,554,501 and balance carried
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forward as at 20 June, 2023 of Kshs.18,106,300. However, examination of the supporting
documents revealed that out of the opening balance of Kshs.28,136,619, bill totalling
Kshs.25,812,149 were paid during the year, while the remaining balance of
Kshs.2,324,470 was carried forward to 2023-2024 financial year, contrary to the provision
of Regulation 41(2) of the Public Finance Management (County Governments)
Regulations, 2015 which provides that debt service payment shall be a first charges on
the County Revenue Fund.
In addition, records from the Kenya Revenue Authority indicate that the County Assembly
of Kisii owed the Authority Kshs.358,338,085. However, annexure 1 on pending bills does
not disclose the unpaid debts to KRA. No satisfactory explanation was provided on the
debt exposure and management plan to clear the debt could not be confirmed.
Other Matter
476. Prior Year Unresolved Issues
Financial Statements and Report on Effectiveness in Use of Public Resources. However,
Management has not resolved the issues or given any explanation for failure to adhere
to the provisions of the Public Sector Accounting Standards Board template.

RESOURCES
477. Irregular Employment of Ward Staff
Review of records revealed that the County Assembly paid salaries and allowances
amounting to Kshs.5,175,324 to two hundred and five (205) ward staff recruited during
the year under review. However, no evidence was provided to show that the recruitments
were approval and confirmed by the County Assembly Service Board. Further,
employment contracts were executed between the ward staff and the Members of the
County Assembly and not with the County Assembly Service Board. This was contrary to
Section 25(1) (a) of the County Assembly Service Act, 2017, which provides that the
County Assembly Service Board is responsible for the appointment and confirmation in
appointment of officers and other staff.
478. Irregular Payments of Benefits to the Suspended County Assembly Clerk
Review of records revealed that the County Assembly paid salaries and allowances
amounting to Kshs.3,535,960 to the County Assembly Clerk who had been suspended
from his duties on 24 August, 2022 pending investigations. This was contrary to
Paragraph K.7 (2) of the Human Resource Policies and Procedure Manual for the Public
Service 2016 which stipulates that where an officer is suspended from the exercise of the
185
functions of his public office, he/she shall be entitled to full house allowance, medical
benefits and no basic salary.
In the circumstances, Management was in breach of the guidelines of the Human
Resource Policies and Procedure Manual for the Public Service 2016.
Review of records revealed that the County Assembly had four twenty-five (425)
employees, out of which four hundred and fourteen (414) or 97% were from the dominant
ethnic community, contrary to Section 7(1) and (2) of the National Cohesion and
Integration Act, 2008, which requires that a public establishment shall seek to represent
the diversity of the people of Kenya in employment of staff.
480. Delayed Construction of Ward Office at Bogiakumu
Review of documents revealed that the contract for the construction of Bogiakumu Ward
Office was awarded to a local contractor on 24 January, 2019 at a contract sum of
Kshs.7,350,465. The site handing over was done on 2 September, 2021 with expected
completion date of 2 February, 2022. During the year the contractor was paid an amount
of Kshs.1,766,963 while the previous year Kshs.4,237,326 had been paid to the
contractor, bringing the total payments on the contract to Kshs.6,004,289.
However, physical inspection on 3 August, 2023 revealed that the project was incomplete
as external works and paintings had not been done. Further, Management did not provide
for audit the revised work plan and there was no evidence of contract extension as the
previous contract had lapsed.
In the circumstances, value for money on the expenditure of Kshs.6,004,289 incurred on

the project could not be confirmed.
481. Construction of Official Residence of the Speaker
Management awarded the contract for the construction of Kisii County Assembly
Speaker’s residence at a contract sum of Kshs.32,970,110 to a local contractor.
Although, Management has not paid the contractor during the year under review, the
progress report dated 1 October, 2023 shows an overall actual progress of 18%, against
time elapsed of 28%, an indication that the contractor was behind schedule. Further,
Management did not provide for evidence that it owns the land on which the residence
was being constructed.
In the circumstances, value for money on the expenditure incurred on the project could
not be confirmed.
186
482. Lack of Approved Risk Management Policy
During the year under review, the County Assembly did not have an approved Risk
Management Policy and Framework. It was further noted that Management did not carry
out risk assessment, come up with a risk register and develop risk management
strategies. A system of risk management and internal control builds robust County
Assembly operations.
In the circumstances, the effectiveness of risk management in the County Assembly could
not be confirmed.
483. Lack of ICT Policies, Plans and Procedures
Review of the Information Communication Technology (ICT) environment revealed the

County Assembly did not have an ICT Policy and ICT Security Policy. In addition, the
County Assembly lacked an ICT Steering Committee and an ICT Strategic Plan to
formulate policies and advice on ICT investment priorities.
Further, the County Assembly did not have a Business Continuity Plan or Disaster
Recovery Plan in place for its information systems.
In the circumstances, the County Assembly did not have tools which it could use to
minimize risk of errors, fraud and the loss of data, confidentiality and integrity.
484. Failure to Tag Assets
Audit review of the asset register presented for audit for financial year 2022/2023 revealed
that Management did not tag its assets to ensure that proper control systems exist for
assets and that movement and conditions of assets can be tracked.
In the circumstances, the effectiveness of the internal controls on the assets management
187
COUNTY ASSEMBLY OF NYAMIRA – NO.46
485. Inaccuracies in Third Party Deposits and Retention
The statement of financial assets and liabilities and as disclosed in Note 8 reflects third
party deposits and retentions of Kshs.19,181,437. However, a recalculation of the amount
based on opening balance of Kshs.25,863,211, deposits to the account of
Kshs.16,559,967 and payments of Kshs.16,497,707 as detailed in IFMIS ledger indicate
a closing balance of Kshs.25,925,471 resulting in an unexplained variance of
Kshs.6,744,034. Further, as a result of the inaccuracies, the reported decrease in
accounts payable in the statement of cashflows of Kshs.6,681,774 is not correct.
In the circumstances, the accuracy of third-party deposits and retentions of

486. Unsupported Basic Wages of Temporary Employees
The statement of receipts and payments and as disclosed under Note 2 to the financial
statements reflects compensation of employee amount of Kshs.304,964,323. Included in
the amount is Kshs.66,437,551 in respect of basic wages of temporary employees out of
which an amount of Kshs.22,366,800 paid to ninety-nine (99) staff employed at ward
offices was not supported with the payment details and recommendation of employment
by the County Assembly public service Board.
In the circumstances, the accuracy of the expenditure of an amount of Kshs.22,366,800

in respect of basic wages of temporary employees could not be confirmed.
487. Unsupported Expenditure on Hospitality Supplies and Services
The statement of receipts and payments and as detailed in Note 3 to the financial
Statement reflects use of goods and services of Kshs.285,755,986. Included in the
amount is Kshs.19,354,400 in respect to hospitality supplies and services. However,
review of supporting documents including payment vouchers, invoices and list of
participants for an expenditure of Kshs.5,114,600 relating to conference facilitation did
not disclose the specific activity undertaken by the county.
In the circumstances, the occurrence of the expenditure of Kshs.5,114,600 in respect of

hospitality supplies and services could not be confirmed.
488. Unsupported Office and General Supplies and Services
statements reflects use of goods and services of an amount of Kshs.285,755,986.
Included in the amount is Kshs.4,771,718 in respect to office and general supplies and
188
services. However, items purchased including stationery, cleaning materials, toners and
cartridges worth Kshs.4,383,458 were not recorded in the stores ledgers and issue notes
(S11).
In the circumstances, the occurrence and completeness of office and general supplies
and services expenditure of Kshs.4,383,458 could not be confirmed.
489. Inaccuracies in Transfers to Other Government Entities
The statements of receipts and payments and as disclosed in Note 4 to the financial
statements reflects transfers to other government entities of Kshs.127,000,000 in respect
of mortgage scheme fund. Review of the payment details and bank statements revealed
that an amount totalling Kshs.74,350,455 was transferred on different dates to County
Assembly of Nyamira imprest bank account. However, the transfers were not disclosed
in the financial statements and were not supported with bank statements, expenditure
budget requisitions, expenditure returns and imprest register.
Further, review of the County Assembly recurrent bank statements and IFMIS payment
details for the year revealed an amount totalling Kshs.174,859,860 and Kshs.180,711,654
respectively were transferred to the mortgage and car loan scheme fund resulting in an
unexplained and unreconciled variances of Kshs.47,859,860 and Kshs.53,711,654
respectively.
In the circumstances, the accuracy and completeness of the transfers to other

government entities of Kshs.127,000,000 could not be confirmed.
490. Cash and Cash Equivalents Balance
490.1 Unsupported Reconciling Items
The statement of assets and liabilities and as disclosed in Note 7 of the financial
statements reflects Kshs.19,318,802 in respect of cash and cash equivalents. A review
of the corresponding bank reconciliation statements as at 30 June, 2023 for the bank
revealed that recurrent account receipts in cashbook not in bank of Kshs.28,629,102 was
not supported. Further detailed schedule of payments in cashbook not in bank of
Kshs.29,057,676 did not include dates of payment. Imprest account receipts in cashbook
not in bank of Kshs.5,421,240 was not supported. Further, detailed schedules of
payments in cashbook not in bank of Kshs.5,632,962 were not provided for audit review.
Salaries account schedules for payment in cashbook not in bank of Kshs.2,118,915 were
undated.
490.2 Unreconciled Variances - Development Account
As disclosed in Note 7 to the financial statements, the statement of assets and liabilities
reflects cash and cash equivalents balance of Kshs.19,318,802. Included in the balance
is Kshs.3 in respect of the County Assembly Development Account as supported by bank
certificate balance. However, review of the development account bank statements
revealed a balance of Kshs.43,478,760 as at 30 June, 2023 resulting to unexplained and
189
Further, bank reconciliation statement as at 30 June, 2023 reflects balance of
Kshs.43,478,757 in respect of receipts in cash book not yet recorded in bank statement
that were not supported. Similarly, the bank reconciliation statements reflect payments
totalling Kshs.43,478,757 which were made in cashbook but not in the bank whose
detailed schedule did not include the date of payments.
In the circumstances, the accuracy and completeness of the cash and cash equivalent
491. Non-Disclosure of Outstanding Imprest
The statement of financial assets and liabilities did not disclose balance in respect of
outstanding imprests. However, review of the bank reconciliation statements in respect
of recurrent expenditure revealed total payments of Kshs.29,057,676 that were made in
cash book but not in the bank included a total of Kshs.21,645,400 being imprest payments
not surrendered.
In the circumstances, the accuracy and completeness of the Nil balance in respect of
unsurrendered imprest could not be confirmed.
492. Non-Compliance with Cut-Off Date

However, included in the amounts is Kshs.75,082,148 comprising recurrent expenditure
of Kshs.29,057,676 and development expenditure of Kshs.46,024,472 made after the
financial year cut-off date of 30 June, 2023 in breach of Regulation 97(1)(4) of the Public
Finance Management Act (County Governments) Regulations, 2015 which prohibits cash
transactions after the financial year cut off.
In the circumstances, the accuracy of payments of Kshs.872,412,911 could not be

confirmed.
Emphasis of Matter
493. Pending Bills
Note 1 of Other Important Disclosures and Annexure 1 to the financial statements reflects
pending accounts payable balance of Kshs.41,773,934 which were not settled during the
year under review but were carried forward to 2023/2024 financial year. The Management
has presented payment vouchers indicating that the pending bills have since been
cleared. However, the payments were not supported with invoices and bank statements.
have to be charged.
190
Other Matter
As disclosed under the progress on follow up of auditor’s recommendation section of the

financial statements, are eight (8) prior year issues. However, Management indicated that
four (4) were resolved and remaining four (4) not resolved. Management did not provide
reports and invitations from the oversight committee’s detailing the deliberations and
recommendations of the committees. Further, no explanations was provided for the delay
in resolving the outstanding issues.

RESOURCES
The County Assembly has a total staff of two hundred and forty-nine (249) employees.
However, two hundred and forty-six (246) staff members are from the dominant ethnic
group forming 99% of the total staff composition. This was contrary to Section 7(2) of the
National Cohesion and integration Act, 2008 which requires that no public establishment
shall have more than one third (1/3) of its staff from the same ethnic community.
496. Unsupported Recruitment of Staff
As disclosed in Note 2 to the financial statement, the statement of receipts and payments
reflects compensation of employee of an amount of Kshs.304,964,323 which includes an
amount of Kshs.22,366,800 paid to ninety-nine (99) staff employed at the ward offices
recruited during the year. However, supporting documents including the advertisements,
appointment of recruitment panels, shortlisted candidates and interview performance
report and recommendation of the County Assembly public service Board was not
provided for audit review. This contravenes Section 12(7)(b) of the County Government
Act, 2012 which provides that the County Assembly Service Board is responsible for
constituting offices in the County Assembly services, and appointing and supervising
office holders.
In the circumstances, Management was in breach of the law and the fairness in the
recruitment process could not be confirmed.
497. Delay in Completion of Construction works of Nyamira County Assembly

Offices Block
The County Assembly entered into a contract for construction works of Nyamira County
Assembly Offices block at a contract sum of Kshs.367,000,000 with completion date of
30 June, 2021 which was extended twice to 13 June, 2021 and later to
20 December, 2023 by the contract implementation team. Audit verification on
191
23 November, 2023 revealed that the works were incomplete and the contractor was on
site. Management indicated that amount spent as at 30 June, 2023 was
Kshs.152,816,506 or 42% of works certified. However, supporting documents including
interim payment certificate and Project Implementation Committee reports on reasons for
delay in the project completion dates and subsequent extensions on project timelines
In the circumstance, the County Government may not obtain value for money and the
expected benefits from the projects to the residents of Nyamira County may not be
realized.
498. Stalled Works on Completion of the Construction of Bomwagamo Ward Office
The County Assembly entered into a contract for the proposed construction of a ward
office at Bomwagamo at a contract price of Kshs.6,666,305. The contract period was 548
days commencing on 18 May, 2021 with completion date of 5 November, 2022. However,
review of the supporting documents including the correspondences revealed that the
Director of Supply Chain Management recommended to the Accounting Officer vide a
memo dated 20 April, 2023, for the termination of the contract due to breach of contract
after 67% completion and payment of Kshs.4,499,305 for the works. Audit verification of
the project in November, 2023, revealed that the Accounting Officer had not responded
to the memo, the project was incomplete and the contractor was not on site.
In the circumstances, the County may not obtain value for money and the expected
benefits from the projects to the residents of Nyamira County may not be realized.

governance.
192
COUNTY ASSEMBLY OF NAIROBI CITY – NO.47
500. Variances Between the Financial Statements and the Trial Balance
Review of the trial balance provided for audit revealed the following variances when
compared with the reported amounts in the financial statements;
Financial Trial
Statement Balance
Amount Amount Variance
Item (Kshs.) (Kshs.) (Kshs.)
Transfer to Counties - 451,124,297 (451,124,297)
Transfers to car and other 501,718,392 - 501,718,392
government entities
Surplus for the year 186,253 27,451 158,802
Fund balance brought forward - - 66,416,507 (66,416,507)
accounts payables fund account
Prior year Adjustment 257,636,251 3,241,952 254,394,298
In the circumstances, the accuracy and completeness of the financial statement could not
be confirmed.
501. Variances Between the Financial Statements and the Ledgers
Review of the financial statements balances against the ledger balances revealed totals
of Kshs.2,278,593,737 and Kshs.823,688,711 respectively resulting in unexplained
variance of Kshs.1,800,798,423.
In the circumstances, the accuracy and completeness of the financial statement could not
be confirmed.
502. Inaccuracies in the Statement of Receipts and Payments
The statement of receipts and payments reflects acquisition of assets and other payments
amount to Kshs.24,858,733 as disclosed in Note 10 to the financial statements while the
statement of comparison of budget and actual amounts reflects acquisition of assets
amount of Kshs.4,700,277 respectively resulting in unreconciled and unexplained
variances of Kshs.20,158,456.
In the circumstances, the accuracy and completeness of the acquisition of assets amount
193
503. Unsupported Expenditure on Use of Goods and Services
of Kshs.636,732,521 as disclosed in Note 5 to the financial statements. However,
Management did not provide payment vouchers and other supporting documents which
included receipt, delivery notes, procurement documents and invoices in respect of an
expenditure of Kshs.184,017,712.
In the circumstances, the accuracy and completeness of the use of goods and services
504. Unsupported Expenditure on Acquisition of Assets
The statement of receipts and payments reflects acquisition of assets expenditure of

Management did not provide payment vouchers and supporting documents which include
receipt, delivery notes, procurement documents, invoices and stores receipt statements
in support of an expenditure amounting to Kshs.23,082,956.
In the circumstances, the accuracy and completeness of the acquisition of assets amount
505. Unsupported Prior Year Adjustments
The statement of financial assets and liabilities and as disclosed in Note 17 to financial
statements reflects a balance of Kshs.257,636,250 in respect of prior year adjustment
whose nature, line items affected and other details have not been disclosed as required
by the International Public Sector Accounting Standard number 3.
In the circumstances, the accuracy and completeness of the prior year adjustment
506. Inaccurate Statement of Cashflows
The statement of cash flows reflects cash and cash equivalents as at the end of the year
of Kshs.186,253. However, the statement reflects other payments amounting to
Kshs.12,311,252 under payments for operating expenses which differs with the amount
paid and reported in the statement of receipts and payments amount of Kshs.12,080,000
resulting to unreconciled variance of Kshs.231,252. Further, the cash and cash equivalent
balance at the start of the year is reported as Kshs.231,253 while the prior year audited
financial statements reflects a balance of Kshs.26,991 resulting in unreconciled variance
of Kshs.204,261.
In the circumstances, the accuracy and completeness of the statement of cash flows
194
507. Misclassification of Expenditure
Review of the financial statements and the ledgers revealed items charged into incorrect
account codes resulting in misclassification of expenditure totalling Kshs.319,547,787.
In the circumstances, the accuracy and completeness of the expenditure totalling

508. Inaccuracies in Cash and Bank Balances
The statement of assets and liabilities reflects total cash and cash equivalents balance of
Kshs.186,253 held in five (5) bank accounts as disclosed in Note 13A to the financial
statements. Review of bank balance documents revealed that the CBK development
account had a closing balance of Kshs.166,380. However, review of the cashbook
revealed that the County Assembly received a total of Kshs.20,213,916 while Note 10 to
the financial statements acquisition of assets expenditure of Kshs.24,858,733 resulting in
an unexplained variance reflects Kshs.4,644,817.
Further, the deposit account cashbook reflects a balance of Kshs.17,953 which was not
disclosed in the financial statement. Similarly, the recurrent imprest account balance of
Kshs.10,806 differs with the cashbook balance of Kshs.2,367,916 resulting in an
unreconciled variance of Kshs.2,357,110. The salary account had a closing balance of
Kshs.6,365 which differed with the cashbook balance of Kshs.1,675,544 resulting in an
In the circumstances, the accuracy of the cash and cash equivalents balance of
Kshs.186,253 could not be confirmed.
509. Undisclosed Motor Vehicle Reimbursements
Review of payment details provided revealed that Kshs.279,703,949 was transferred from
Car and Mortgage Scheme Fund on 15 February, 2023 to Nairobi City County Assembly
vehicle reimbursement account. However, the amount was not disclosed in the County
financial statement. Further, the motor vehicle reimbursement account balance was not
disclosed in Note 13A to the financial statements casting doubt on the transfer of
Kshs.279,703,949.
In the circumstances, the occurrence of the amount of Kshs.279,703,949 transferred from

Car and Mortgage Scheme Fund could not be confirmed.
510. Unsupported Other Operating Expenses
totalling Kshs.636,732,521 as disclosed in Note 5 to the financial statements which
includes Kshs.39,521,628 in respect of other operating expenses. However, review of
sampled payment vouchers totalling Kshs.4,558,964 in respect of rent expenditure
revealed that rent was paid to different persons with different account numbers contrary
to the ones specified in the lease tenancy agreements.
195
In the circumstances, the accuracy and completeness of other operating expenses
511. Unsupported Communication, Supplies and Services
of Kshs.636,732,521 as disclosed in Note 5 to the financial statements which includes
expenditure of Kshs.4,017,600 in respect of communication, supplies and services.
However, review of payment vouchers in respect of airtime amounting to Kshs.2,817,000
revealed they were not supported by approvals and complete beneficiary lists.
In the circumstances, the accuracy and completeness of the payments under

communication, supplies and services amounting to Kshs.2,817,000 could not be
confirmed.
512. Unsupported Domestic Travel and Subsistence
expenditure of Kshs.200,830,325 in respect of domestic travel and subsistence. However,
payment vouchers provided totalling Kshs.12,010,385 were not supported by relevant
documents including, original invitations and approvals, boarding passes, attendance
lists, conference venue invoices and cash receipts.
subsistence amount of Kshs.12,010,385 could not be confirmed.
513. Unsupported Foreign Travel and Subsistence
expenditure of Kshs.191,323,977 in respect of foreign travel and subsistence. However,
payment vouchers totalling Kshs.36,447,345 were not supported by relevant documents
including, original invitations and approvals, boarding passes, attendance lists,
conference venue invoices and cash receipts.
In the circumstance, the accuracy and completeness of the foreign travel and subsistence
514. Unsupported Accounts Payables
Note 1 under other important disclosures to the financial statement reflects pending
accounts payables balance of Kshs.189,540,979. However, the account payable balance
excluded amount of Kshs.60,546,051 received from Car Loan and Mortgage Account as
disclosed in Note 3 to the financial statement.
In the circumstances, the accuracy and completeness of the pending accounts payable
196
515. Unsupported Salary Advances
The statement of assets and liabilities reflects outstanding imprests and advance balance
of Kshs.258,051,837 as disclosed in Note 14 to the financial statements. The balance
comprises of outstanding imprest balance of Kshs.255,989,837 and advances balance of
Kshs.2,062,000. However, the advance balances includes advance to four (4) staff
members amounting to Kshs.612,000. Further, Management did not explain why imprest
was not surrendered within seven (7) days after return from field work.
In the circumstances, the accuracy of the outstanding imprests and advance balance of
Emphasis of Matter
The statement of comparison of budget and actual amounts reflects a final revenue
budget and actual amounts on comparative basis of Kshs.2,409,148,302 and
Kshs.1,884,769,276 respectively resulting to revenue shortfall of Kshs.524,379,026 or
22% of the budget. Similarly, the County Assembly spent Kshs.1,884,583,024 against an
approved budget of Kshs.2,409,148,302 resulting in an under-expenditure of
Kshs.524,565,278 or 22% of the budget.
In the circumstances, the under-performance and under-expenditure affected the planned

activities and may have impacted negatively on service delivery to the public.
517. Pending Bills
As disclosed in Note 1and 2 on other disclosures, the County Assembly had pending
accounts payable balance of Kshs.512,320,974 comprising pending accounts payables
of Kshs.189,540,979 and staff payable of Kshs.322,779,995. Management did not explain
why the bills were not settled during the year when they occurred.
Failure to settle bills during the year to which they relate to distort the financial statements
and adversely affects the budgetary provisions for the subsequent year as they form a
first charge.
Other Matter
explanation for failure to do so, as provided for in the reporting template prescribed by the
Public Sector Accounting Standards Board.
197
REPORT ON LAWFULNESS AND EFFECTIVENESS IN THE USE OF PUBLIC
RESOURCES
519. Non-Compliance with Fiscal Responsibility Principles

represents approximately 37% of the transfers from CRF of Kshs.1,748,810,398 being
2% percentage points over and above the maximum allowed ceiling contrary to
Regulation 25 (1)(b) of the Public Finance Management (County Governments)
Regulations 2015 which requires the expenditure set should not exceed thirty-five (35)
percent of the County Government’s revenue.
520. Irregularities in Recruitment of Members of Staff
Review of recruitment of staff documents revealed that the County Assembly recruited
three (3) members of staff during the year under review. However, the following
anomalies were noted;
i. Confirmed minutes by the staff advisory committee on recruitment of the three (3)
staff members were not provided for audit.
ii. Confirmed minutes by the County Assembly of Nairobi Service Board on adopting
the recommendations of the staff advisory committee and recruiting the three (3)
members of staff were not provided for audit.
iii. Their academic certificates were not submitted to Kenya National Qualification
Authority for validation and authentication.
iv. No needs analysis for existence of the above vacancies was provided for audit
v. Review of the personal files for the recruited staff revealed lack of vital documents
including ethics and anti-corruption report on declaration of wealth and liabilities
on first appointment, NHIF and NSSF registration certificates and IPPD data
capture sheet.
In the circumstances, it was not possible to establish how the three (3) officers were
introduced in the payroll without these documents.
521. Non-Remittance of Statutory Deductions
Management deducted Pay as you Earn (PAYE) of Kshs.64,007,345, National Hospital

Insurance Fund (NHIF) of Kshs.3,576,750 and National Social Security Fund (NSSF) of
Kshs.2,400 during the year under review. However, there was no evidence that the
amounts were remitted to the respective institutions. This was contrary to Section 37(1)
198
of the income Tax Act which states that an employer paying emoluments to an employee
shall be deducted therefrom and account for tax thereon, to such extent and in such
manner as may be prescribed.
522. Irregular Payments to Service Providers Using Imprest
The County Assembly made payments to service providers amounting to Kshs.3,454,900

for provision of facilitation services to various committees during the financial year under
review. The payments were in respect of facilitation fee, per diem and ground transport.
However, evidence of procurement procedures used to identify the facilitators and to
contract them for service provision were not provided for audit. Further, no explanation
was provided by Management for use of imprest in procurement and payment to service
providers which amounts to direct procurement without justification.
523. Irregularities in Legal Contracts
Review of legal records revealed that the County Assembly made payments amounting
to Kshs.38,708,640 to various legal firms engaged directly from the prequalified list of
suppliers. This however contravenes the Public Procurement and Disposal Act, 2015 and
Civil Procedure Act Chapter 21. Further, review of payment vouchers relating to payment
of legal services revealed that there were no contracts between the advocate and the
County Assembly, no itemized fee notes, no detailed service provided by the lawyers
upon which the fee note was based and no current status of the legal cases was provided
for audit.
In the circumstances, value for money on the legal services amounting to

524. Irregular Expenditure on Subscriptions
of Kshs.279,413,929 which, as disclosed in Note 3 to the financial statements, includes
other operating expenses amount of Kshs.41,137,171 out of which, amounts of
Kshs.4,450,000 and Kshs.750,000 were paid to the County Assembly Forum (CAF) and
Society of Clerks-at-The-Table in Kenya (SOCATT(K)) respectively as subscription fees.
However, the payments lacked legal backing and supporting policy guidelines.
In the circumstances, value for money on the subscription’s expenditure of

525. Non-Compliance with Ward Partisan Staffing Levels
Review of staffing records revealed that the County Assembly employed a total number
of two hundred (200) partisan staff for the wards against the set limit of one hundred and
forty-four (144) as per circular number CRA/CSO/CMG//9/VOLV/59 dated
21 October, 2020 on Advisory of Ward Offices Operation Costs from the Commission on
Revenue Allocation.
199
526. Unutilized Speaker’s Residence
The Speaker’s residence of the County Assembly of Nairobi City was awarded at a cost
of Kshs.55,811,842 and a final completion certificate issued on 26 August, 2021 in
respect of the project. During the year under review an amount of Kshs.2,028,303 was
paid to the contractor as the final payment. However, physical inspection conducted on
10 November, 2023 revealed that the project was complete but the residence was not in
use.
In the circumstances, value for money on the expenditure of Kshs.55,811,842 incurred
on the construction of the Speaker’s residence could not be confirmed.
200
APPENDIX
A: List of County Assemblies and Audit Opinions given on their Financial

Statements
1. Certificates with a Disclaimer of Opinion

None
2. Certificates with Unqualified Opinion
S/N County Code County Assembly Opinion

1. 10
Marsabit Unqualified
2. 26
Trans Nzoia Unqualified
3. 39
Bungoma Unqualified
3. Certificates with Qualified Opinion

1. 1
Mombasa Qualified
2. 2
Kwale Qualified
3. 3
Kilifi Qualified
4. 4 Tana River Qualified
5. 5
Lamu Qualified
6. 6
Taita/Taveta Qualified
7. 7
Garissa Qualified
8. 8
Wajir Qualified
9. 9
Mandera Qualified
10. 11 Isiolo Qualified
11. 12
Meru Qualified
12. 13
Tharaka-Nithi Qualified
201
13. 14
Embu Qualified
14. 15
Kitui Qualified
15. 16 Machakos Qualified
16. 17
Makueni Qualified
17. 18
Nyandarua Qualified
18. 19
Nyeri Qualified
18. 20
Kirinyaga Qualified
20. 21
Murang’a Qualified
21. 22 Kiambu Qualified
22. 23
Turkana Qualified
23. 24
West Pokot Qualified
24. 25
Samburu Qualified
25. 27
Uasin Gishu Qualified
26. 28
Elgeyo/Marakwet Qualified
27. 29 Nandi Qualified
28. 30
Baringo Qualified
29. 31
Laikipia Qualified
30. 32
Nakuru Qualified
31. 33
Narok Qualified
32. 34
Kajiado Qualified
33. 35 Kericho Qualified
34. 36
Bomet Qualified
35. 37
Kakamega Qualified
36. 40
Busia Qualified
202
37. 41
Siaya Qualified
38. 42
Kisumu Qualified
39. 43 Homa Bay Qualified
40. 45
Kisii Qualified
41. 46
Nyamira Qualified
4. Certificates with Adverse Opinion

1.
38 Vihiga Adverse
2.
44 Migori Adverse
3.
47 Nairobi Adverse
203
CONTACTS
3rd Floor, Anniversary Towers,University Way, Nairobi
Phone: +254 020 3214000 | Email: info@oagkenya.go.ke | Website: https://www.oagkenya.go.ke/
Office of the Auditor-General Kenya oagkenya @OAG_Kenya

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Enhancing Accountability

OUR CORE VALUES

THE COUNTY GOVERNMENTS

THE YEAR 2022/2023

VOLUME 2 – COUNTY ASSEMBLIES

VOLUME 2 – COUNTY ASSEMBLIES Page

Foreword…………………… ....................................................................................... iii

1. County Assembly of Mombasa ................................................................. 1

Further, as previously reported, an effective mechanism for follow-up on the

VOLUME 2 – COUNTY ASSEMBLIES

1.1 Legal Mandate of the Office of the Auditor-General

1.2 Responsibilities of Management and those Charged with Governance

Further, Management is responsible for maintaining effective internal control environment

1.3 Auditor-General’s Responsibility

My responsibility is to conduct audits of the financial statements in accordance with the

1.4 Reporting Structure

i. Report on Financial Statements, in which I give an audit opinion on whether the

1.5 Audit Opinions

a) Unmodified/ Unqualified Opinion

1.6 Audit Findings

REPORT ON THE FINANCIAL STATEMENTS

1. Variance in Exchequer Releases

2. Variance in Compensation of Employees

3. Budgetary Control and Performance

My opinion is not modified in respect of this matter.

Basis for Conclusion

4. Irregular Payment of Legal Fees

REPORT ON THE EFFECTIVENESS OF INTERNAL CONTROLS, RISK

REPORT ON THE FINANCIAL STATEMENTS

Basis for Qualified Opinion

7. Budgetary Control and Performance

8. Unresolved Prior Year Audit Issues

REPORT ON LAWFULNESS AND EFFECTIVENESS IN USE OF PUBLIC

9. Irregular Payment of Ward Officers’ Salaries

In addition, Management did not provide for audit advertisements, applications,

10. Over Commitment of Salaries

In the circumstances, Management was in breach of the law.

REPORT ON EFFECTIVENESS OF INTERNAL CONTROLS, RISK MANAGEMENT

Basis for Conclusion

REPORT ON THE FINANCIAL STATEMENTS

Basis for Qualified Opinion

12. Misclassification of Personal Allowances to Domestic Travel

13. Unresolved Prior Year Matters

REPORT ON LAWFULNESS AND EFFECTIVENESS IN USE OF PUBLIC

14. Employment of Members of Staff above the Approved Ceiling

In the circumstances, Management was in breach of the Commission on Revenue

15. Non-Compliance with One Third Basic Salary Rule

In the circumstances, Management was in breach of the law.

16. Non-Compliance with Law on Ethnic Diversity

In the circumstances, Management was in breach of the law.

17. Stalled Construction of County Assembly Offices

Basis for Conclusion

18. Failure to Establish Audit Committee

19. Lack of Approved Staff Establishment

REPORT ON THE FINANCIAL STATEMENTS

Basis for Qualified Opinion

20. Inaccuracies in the Transfers from the County Treasury/Exchequer Releases

21. Unsupported Payments on Printing, Advertising and Information Supplies

In the circumstances, the accuracy and completeness of the payments amounting to

22. Budgetary Control and Performance