Ghost workers, missing millions: Audit unearths financial rot in judiciary

A new audit report has exposed deep financial mismanagement at the Judiciary, revealing unsupported expenditures, ghost workers, and multi-million-shilling projects that have either collapsed or failed to deliver value to taxpayers.

Auditor General Nancy Gathungu’s review for the financial year ending June 2024 has uncovered how taxpayers may have lost billions of shillings as a result of missteps by the Judiciary’s management.

The report highlights a disturbing pattern of public funds disappearing into ghost worker payrolls, collapsing multimillion-shilling infrastructure projects, and questionable expenditures with no paper trail.

At the centre of the financial haemorrhage are questionable personal allowances of Sh182 million and leave allowances of Sh131 million that were not supported by ledger and payroll analysis.

A review of payroll data revealed the possibility of 2,180 ghost workers, casting doubt on the validity of Sh4.9 billion that the Judiciary spent on personal allowances during the year under review.

The recruitment details and records for the additional staff, whose existence could not be verified through recruitment records, were not provided for audit review, hence unsupported.

“In the circumstances, the regularity, accuracy and completeness of the compensation for employees of Sh14 billion couldn’t be confirmed,” Gathungu said.

Taxpayers may have also effectively thrown away Sh445 million on the Mombasa law courts building, which was completed in 2021 but is now recommended for demolition due to structural defects.

A final structural assessment report by the Housing ministry in May last year recommended the demolition of the building due to high costs associated with repair works.

Gathungu said the public did not obtain value for the Sh445 million spent on the court building.

The auditor has further questioned a payment of Sh100 million, which was part of an arbitral award to a contractor who was involved in the construction of the Lodwar court.

The Judiciary was sued by the contractor for breaching contractual obligations, which resulted in delayed payments and eventual termination of the contract.

The auditor says the payment could have been avoided if the Judiciary had adhered to the contract terms.

“Regularity and value for money could not be confirmed,” the report concludes.

Further losses appear in unexplained expenditures, including Sh37 million paid for air tickets without invoices and Sh55 million spent on training programmes that never had proper approvals or participant lists.

The expenditure was not supported by an approved training plan, training needs assessment, approval and list of employees nominated for the training.

“The regularity, accuracy and completeness of foreign travel, subsistence and training expenses totalling Sh93 million couldn’t be confirmed,” the Auditor General said.

Compounding the queries is a revelation that the Judiciary did not prepare and submit monthly bank reconciliation statements to the Auditor General for review, hence breached the law.

Gathungu further suggested misuse of confidential expenditure, saying there was a need to enhance accountability of the vote. The expenditures, though certified, lack robust oversight mechanisms.

Gathungu has called for clearer regulations to define eligible entities and operations, along with detailed budgets and post-operation summaries to enhance accountability.

She says the regulations should specify what constitutes security-related operations.

The Auditor General wants internal oversight mechanisms revamped, budgets made detailed and post-operation financial summaries issued.

She argues that the steps would address the risks and ensure responsible use of and accountability for the funds, beyond the certificate that accounting officers prepare for audit review.

“The measures will strengthen governance, foster trust, and ensure funds are utilised responsibly without compromising state security,” Gathungu said.

The Judiciary also failed to settle pending bills of Sh872 million during the year and carried the same forward to the current spending period.

The amount includes Sh82 million relating to the 2022-23 financial year, while 91 per cent was incurred in the audit year.

This was in violation of the presidential directive for pending bills to be settled by the end of each financial year, so as not to distort financial statements of the year.

Also cited are internal capacity challenges, which are believed to hamper budget utilisation, hence the failure to absorb Sh520 million development budget.

Contractors, as a result, failed to resume work due to rising costs associated with inflation, delayed procurement processes and delays in certification of works.

“There was no evidence of plans to build capacity to address these challenges,” Gathungu said, adding that the situation could compromise the Judiciary’s transformation plan.

Compounding these issues is the Judiciary’s failure to operationalise 34 gazetted courts, leaving 141 out of 175 functional.

Among the non-operational facilities are 11 courts established in 2020 in Zombe, Borabu, and Usigu.

No plans were provided to bring these courts online, undermining access to justice in underserved regions.

“The effectiveness of service delivery to the public couldn’t be confirmed,” Gathungu remarked.

The report also flags systemic governance failures, including the Judiciary’s breach of law for not submitting monthly bank reconciliation statements. 

Besides the employee compensation question, the Judiciary was found to be non-compliant with staff establishment, as the numbers were riddled with discrepancies.

In-post records showed there were 6,682 staff, a shortage of 721 judges, and overstaffing of 730 in seven job groups.

“The non-compliance with the staff establishment may affect service delivery to the public,” Gathungu said.

“The effectiveness of the internal controls and the regularity of human resources management processes could not be confirmed.”

With Sh520 million in development funds underutilised due to procurement delays and contractor withdrawals, the Judiciary’s transformation agenda is at risk. 

The findings suggest not just financial mismanagement but a fundamental breakdown in governance at one of the country’s most crucial institutions.

INSTANT ANALYSIS

As the details emerge, hard questions must be asked about how billions in taxpayers’ money could vanish without proper accounting, and what mechanisms exist to recover these losses and hold responsible officials accountable. The scale of irregularities suggests these are not mere administrative lapses but potentially criminal mismanagement of public resources that demand urgent intervention.