Kisumu Governor Anyang’ Nyong’o has fought off claims his administration could have colluded with three law firms to defraud the county of Sh137 million.
The governor, who was appearing before a Senate committee, was taken to task to explain the payments after it was flagged by Auditor General Edward Ouko in his 2017-18 report.
The audit had revealed the Nyong’o administration paid Sh60 million to partly offset the Sh137.64 million as legal fees to the firms without authorisation from the Attorney General.
"Why didn't you seek the authorisation of the Attorney General before making this payment? And was the appeal not lodged," Senate County Public Accounts and Investment Committee chairman Moses Kajwang asked.
The payment was made to Ken Pundo and Company Advocates, the expenses having been incurred by the defunct Kisumu Municipal Council in the collection and remittance of outstanding rates.
The council was supposed to pay the firm 15 per cent of the collections but failed to honour the agreement, prompting the firm to seek legal redress.
Later, the county engaged Amondi and Co Advocates and Ogejo Olendo and Co. Advocates to take up the case. The county did not provide the contract agreement of the two firms.
"As a result, the county government of Kisumu incurred an illegible expenditure of Sh137,642,730 by the court ruling and accrued interest relating to this case which resulted in an ineligible expenditure," the report said.
Nyong’o said his officers were compelled to pay the debt following a court order against the county.
"There was nothing that we could have done as a county because we were complying with a court order that was issued against us," he said.
He explained that the case was historical and the county government risked incurring huge interests if it failed to make the payment.
The county chief said his administration was ready for a probe by the Ethics and Anti-Corruption Commission to ascertain the authenticity of the payments.
Nyong’o was a familiar face to the committee, having served as its chairman in the last Parliament. He and his finance officers were also pressed to explain why they failed to disclose that the administration collected some Sh5.3 million from staff as an income but failed to declare it.
"Your officers collected this money as rent from your staff but failed to disclose the same. What was the money pocketed? Where did it go, Mr Governor?" Kajwang' asked.
The governor, through his chief finance officer Erick Orangi, blamed the anomaly on failure to update the Local Authority Integrated Financial Operations Management System (Laiforms).
(Edited by F'Orieny)
