A new audit report following a review of TSC accounts for the year to June 30, 2022, has revealed that the commission’s payroll has internal controls weaknesses.
Auditor General Nancy Gathungu in the report tabled in Parliament recently says her review unearthed duplicate details, adding it was possible the commission was making multiple payments.
A comparison of the national identification numbers in the teachers’ payroll against the Integrated Personnel and Payroll Database (IPPD) for MDAs indicated that there were 24 employees earning salaries in two entities in the same month.
Gathungu reported that further examination of the IPPD showed the identification number was in both the Teachers’ and Secretariat payrolls but with a different name.
“The amount paid during the year was Sh1,520,192 and Sh483,545 for the Secretariat and teachers’ payrolls, respectively,” the auditor said.
She reported a review of the payroll for the month of June 2022 revealed the existence of 79 employees with similar names, similar bank account numbers but different payroll numbers.
A total of Sh4.3 million was paid out to the account while three teachers did not have national identification numbers in the staff register.
“In the circumstances, the internal controls over the management of employees’ payroll are weak and susceptible to loss of the commission’s resources,” Gathungu said.
TSC is among the institutions that receive an enormous share of the budget with Sh316.7 billion allocated to the commission in next year’s budget.
As was in the previous year, the commission has yet again been called out for excess payment of teachers’ salaries.
TSC paid an excess Sh466 million in salaries, being an increase of Sh114 million — 32 per cent from the previous year’s balance of Sh352.8 million.
Gathungu has flagged the anomaly saying, “The origin and build-up of the balance has not been explained.”
She added that the ageing analysis was not provided for audit and as such, it was not possible to establish how long the balances have been outstanding.
The auditor has cast doubt on the recoverability of the overpaid salaries.
“Management has not demonstrated efforts it has made to recover the salary overpayments, thus the recoverability of this receivable is doubtful,” Gathungu said.
This is separate from another overpayment of Sh47 million made to 85 teachers during the year under review.
Gathungu has raised concerns that the outstanding repayment period for these officers will exceed their retirement age of 60 or the end of the contract period.
“Therefore, recovery of the overpayment is in doubt. Further, the Commission management did not provide for audit, a strategy for the recovery of the overpayments beyond the retirement period,” she said.
“In the circumstances, the existence of internal control to safeguard loss of public resources could not be confirmed,” Gathungu added.
The audit has also revealed that payments were made to teachers and the secretariat staff who were not in hardship areas.
In addition, 1,807 teachers, and 135 TSC Secretariat staff were paid salary arrears more than once during the year amounting to Sh197,214,537 and Sh15,509,930 respectively.
Gathungu said the money was not spent in a prudent manner as spelt out in by Article 201(d) of the Constitution of Kenya.
The law states that public money shall be used in a prudent and responsible way.
“In the circumstances, management was in breach of the law,” the Auditor General said, further flagging non-procurement of group life cover.
TSC bought a life cover with a financial institution that expired on 13 May, 2022, and did not procure another after the latter expired.
“The commission was operating without a group life cover. In the circumstances, management was in breach of the law.”
Gathungu has also flagged an over-expenditure of Sh163 million on insurance costs of Sh42.5 million, fuel and oil from the Sh60 million budget to Sh65.7 million, travel by Sh112 million, and hospitality services by Sh3.5 million.
She said the requisite approvals were not provided for audit hence the same remains questionable.
“Over-expenditure on a budget may lead to unplanned expenditures, pending bills, and budget reallocations. In the circumstances, the regularity and validity of the over-expenditure amounting to Sh163,968,426 could not be confirmed,” Gathungu said.
The report further shows that TSC did not deduct PAYE due from 3,281 special needs staff, 3,784 non-special needs staff, and four secretariat staff.
The employees with special needs are denoted by codes 2-9 under the special needs field in the IPPD but the above referenced employees code was zero.
“This is denoting that they are not people with special needs and had not been exempted from paying income tax by the Kenya Revenue Authority.”
“Failure to deduct and remit Pay-As-You-Earn tax is contrary to the Income Tax Act CAP 470. In the circumstances, management was in breach of the law.”
Gathungu has also flagged an unexplained decrease of Sh483,437 and Sh316 million contributed by the employer to National Social Security Fund (NSSF) and Staff Pension Scheme, respectively.
This was despite a general increase in compensation of employees of Sh9,296,034,959, which the auditor argued should result in a proportionate effect on employer contributions to both NSSF and Staff Pension Scheme.
“In the circumstances, the completeness and accuracy of compensation of employees’ balance could not be confirmed,” the auditor said.
(Edited by V. Graham)
