• Audit report says approved budget expenditure totalled Sh7.9 billion but only Sh6.5 billion was spent.
• The under utilisation resulted in under-absorption of Sh1.5 billion, equivalent to 19% of the budget.
Image: MATHEWS NDANYI
Auditor General Nancy Gathungu has faulted the Trans Nzoia county government for failing to absorb more than Sh 1.5 billion causing budgeted projects and services to stall.
Gathungu in her latest audit report for the year 2019-20 also faulted the county headed by Governor Patrick Khaemba for failing to properly account for more than Sh700 million set aside for various activities in the region.
The audit report says the statement of appropriation, recurrent and development combined reflects approved budget expenditure for the county totaling Sh7.9 Billion against actual expenditure OF Sh.6.5 Billion.
The underutilisation resulted in under-absorption of Sh1.5 billion, equivalent to 19 percent of the budget in the year under review.
“As a result of the shortfall of revenue and the under-expenditure, some of the programmes and activities planned for the year under review were not implemented and as a result, delivery of services to the residents of Trans Nzoia county were constrained," Gathungu reported.
She also questioned variances in county financial and details records and details in the Integrated Financial Management System (Ifmis) ledger
She said the statement of receipts and payments reflects receipts totalling Sh6,618,185,169. But Ifmis reflects receipts totalling Sh7,836,553,113.
The differences resulted in an unreconciled variance of Sh882,525,197. In addition, the statement reflects payments totalling Sh6,453,732,447 against Sh5,816,244,849 reflected in the Ifmis ledger, resulting in a variance of Sh637,487,598.
The county did not explain the variances.
“As a result of the unexplained variances, the accuracy and completeness of the receipts and payments reflected in the financial statements was not confirmed," the audit read.
Concerning own-generated revenue, Gathungu said the statement of receipts and payments reflects County own-generated receipts totaling Sh356 million.
The amount included Sh171.3 million collected in public health facilities.
However, examination of revenue records at the Kitale County Referral Hospital revealed under-banking of revenue totaling Sh25,471,505. That is the difference between total receipts amounting to Sh121.2 million and amounts banked or denoted by transfers to the County Revenue Fund, totaling Shs.96 million.
The auditor said as a result, the own-generated revenue receipts balance totaling Sh356 million reflected in the financial statements was not fairly stated.
“By failing to bank all receipts, management contravened Section 109(2) of the Public Finance Management Act, 2012, which requires all revenue receipts to be paid into the County Revenue Fund," the audit read.
The county financial statements also reflect pending accounts payable totaling Sh785.9 million as at 30 June, 2020.
However the county management did not provide supporting records, such as local purchase or service orders, invoices, goods received notes, inspection and acceptance reports and certified interim completion certificates for sampled pending accounts payables totaling Sh206.7 million.
“In the absence of relevant and sufficient evidence, the accuracy, completeness and validity of the pending bills balance totalling Sh785 million as at June 30, 2020 could not be confirmed,” Gathungu said.
The report further notes that pending bills of Sh301 million or 47 per cet of the total reported balance totaling Sh635.9 reflected in the financial statements, had been outstanding for several years. Some were incurred in the 2013-14 financial year when the county government came into being.
The auditor said the county violated the law by failing to pay its bills and further delay payment of pending bills. This inaction slowed down economic activity by denying vendors of goods and services working capital for operations and investments and may discourage the private sector from trading with public entities.
On county assets, the county statement of receipts and payments reflects acquisition of assets totalling Sh1.3 billion. They include payments totalling Sh76.3 million spent on purchase of specialised plant, equipment and machinery.
However, payment vouchers for the items were not supported with approved user requisitions, quotation documents, tender evaluation reports, letters of notification and acceptance of award, inspection and acceptance reports as well as stores records and user distribution lists.
As a result, it was not possible for the auditor general to confirm the accuracy and completeness of the fixed assets balance totaling Sh9.4 billion as at June 30, 2020.
(Edited by V. Graham)