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{
"id": 1408791,
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"text_counter": 239,
"type": "speech",
"speaker_name": "Sen. M. Kajwang’",
"speaker_title": "",
"speaker": {
"id": 13162,
"legal_name": "Moses Otieno Kajwang'",
"slug": "moses-otieno-kajwang"
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"content": "Paper, Members will be pleased to see that we have submitted reports for 10 county assemblies and 15 county executives. Mr. Temporary Speaker Sir, during the period, the committee has noted with concern the rising trend of witnesses failing to appear before the committee without justifiable reasons amounting to contempt of Parliament. The committee has flagged the governors of Isiolo and Nairobi City County Executives and has subsequently summoned them to appear before the Committee in April and May, respectively. This report was approved last week, but I am pleased to note that the Governor of Isiolo was compelled to appear before the committee yesterday. The committee also resolved to impose the maximum fine available under the Parliamentary Powers and Privileges Act to purge the contempt of Parliament. If contempt of the Senate committees is not checked, other governors are likely to follow suit if it does not invite any serious consequences. The Senate should thus explore avenues through amendments of the Parliamentary Powers and Privileges Act, 2017, to provide for stricter penalties, fines, imprisonment, or other punitive measures. Additionally, we have requested the legal directorate to do a paper on the concept of contempt of Parliament and also to share with the committee what other jurisdictions do to ensue enforcement of the directives of Parliament. Mr. Temporary Speaker Sir, the committee undertook a county visit to Isiolo in March for inspection of projects and interrogation of the Reports of the Auditor General for the financial years 2019/2020 and 2020/2021. However, the Governor failed to appear before the committee. As I said earlier, we issued summons and the governor appeared yesterday to explain himself. During project inspection, the committee observed that some of the projects, including the County Headquarters, Isiolo Stadium, Isiolo Market, Mwangaza Dispensary and the Isiolo Referral Hospital Mortuary had either stalled or taken longer than the planned period to complete and the some of the contractors were not on site. The committee directed the Ethics and Anti-Corruption Commission (EACC) to take keen interest on the implementation and projects, and further, the CoB to scrutinize the requisitions relating to the highlighted projects. I also note that when we were in Isiolo, we went to the mortuary and the coolers were not working. In as much as the county government explained that they were working before our visit, they were not able to demonstrate why they were not working during our visit. Mr. Temporary Speaker Sir, the committee continues to note with concern the unhealthy size and growth of wage bills in many of the counties, beyond the recommended 35 per cent threshold and processing of employee emoluments outside the Integrated Personnel and Payroll Database (IPPD). Mr. Temporary Speaker, Sir, payment outside the IPPD poses significant weaknesses for counties, since manual processes are often less transparent and more prone to corruption. Individuals responsible for payroll may manipulate records, create ghost employees, or inflate salaries to siphon county funds. Manual processing of salaries results in loss of audit trails and accountability mechanisms integral in automated information systems since it is difficult verify transactions or hold individuals accountable for discrepancies in salary payments. This The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1408792,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1408792/?format=api",
"text_counter": 240,
"type": "speech",
"speaker_name": "Sen. M. Kajwang’",
"speaker_title": "",
"speaker": {
"id": 13162,
"legal_name": "Moses Otieno Kajwang'",
"slug": "moses-otieno-kajwang"
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"content": "lack of accountability opens the door to fraud and misconduct. This unethical behaviour undermines the integrity of the payroll system and has resulted in massive financial losses in counties. The committee has since invited the Cabinet Secretary, Ministry of Public Service, Performance and Delivery Management, the Council of Governors (COG); and the County Assemblies Forum (CAF) to deliberate on this issue. Again, for emphasis, the National Wage Bill Conference was held about two weeks ago. However, the representatives of legislature were left out and yet some of the interventions required to tame the unhealthy wage bill could rise from budgetary allocations, appropriations by Parliament, statutory or regulatory reforms. I hope that can improve in future. Mr. Temporary Speaker, Sir, during the interrogation of the Auditor-General’s Reports for various county entities, the committee also noted with concern the persistent accruing pending bills, including non-remittance of statutory deductions to the relevant state agencies. The committee has directed the entities to take sustainable measures to address this matter and further directed the Office of the Auditor-General (OAG) and the Controller of Budget (CoB) to closely monitor adherence to this directive. I am glad to note that Sen. Ledama Olekina has brought a Motion to this House on the subject of pending bills. During the interrogation of the various county entities during this period, the committee noted that most entities failed to disclose their contingent liabilities in their financial statements. Some of the contingent liabilities may arise from litigation in progress, guarantees, indemnities, letters of comfort/support, insurance and Public Private Partnerships. Whereas county governments do not need to recognize a contingent liability in their statements of receipts and payments, they need to disclose details of any contingencies in the notes to the financial statements unless the possibility of an outflow of resources embodying economic benefits or service potential is remote. Mr. Temporary Speaker, Sir, some of the counties with the highest contingent liabilities, include the Nairobi City County, with a contingent liability of close to Kshs21.7 billion. Kiambu County has Kshs497 million, and Meru County has Kshs601 million. Other counties did not disclose their contingent liabilities, but there was evidence that there was litigation in progress. If these matters went against some of the county governments, they would be technically insolvent. We saw that with Uasin Gishu where if the issues that are in court were to go against the county government in totality, then the county government would have to pay much more than the revenues they earn locally and from the equitable share revenue This is a matter we have insisted needs to be disclosed. On issues to deal with presentation, accuracy and completeness of the financial statements, the committee has observed that accountants in various entities have often prepared financial reports, which do not comply with the Public Sector Accounting Standards. This amounts to gross negligence in their conduct of professional duties and constitutes professional misconduct pursuant to Section 8(a) and 30 of the Accountants Act, CAP 531. The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1408793,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1408793/?format=api",
"text_counter": 241,
"type": "speech",
"speaker_name": "Sen. M. Kajwang’",
"speaker_title": "",
"speaker": {
"id": 13162,
"legal_name": "Moses Otieno Kajwang'",
"slug": "moses-otieno-kajwang"
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"content": "Financial statements prepared under the International Public Sector Accounting Standards (IPSAS) and prescribed by the Public Sector Accounting Standards Board (PSASB) are critical in decision making process in counties as well as accountability. The committee has planned engagements with these professional bodies - the Institute of Certified Public Accountants of Kenya (ICPAK), the Institute of Human Resource Management (IHRM) and the Kenya Institute of Supplies Management (KISM). These are regulated professions and are regulated through Acts of Parliament. We would like to meet them in a bid to come up with a proper framework of collaboration so that professionals perform their duties with the level and care of skill expected in their field and also recommend disciplinary process for their members who fail to adhere to the standards. Mr. Temporary Speaker, Sir, I am glad to know that, so far, as the Chairperson of the Committee, I had an engagement with the OAG during their annual planning retreat in Mombasa over the weekend, where we shared our concerns on professional responsibility. The Institute of Certified Public Accountants of Kenya (ICPAK) has since responded, even though through a press statement, to some of the issues that have emerged from the Senate deliberation. Mr. Temporary Speaker, Sir, it is comforting that professional bodies are taking note of what is happening in the Senate. The Auditor-General has also cited in its reports that some county entities seem to be in serious or persistent material breach of their financial management principles. The committee has noted that some entities, for example, Nairobi, Kisumu, Baringo, and Tana River counties have had adverse opinions for more than three consecutive years. As a result, the committee is considering invoking the provisions of Article 225(3) and Section 96(1) of the Public Finance Management Act on the stoppage of funds. Stoppage of funds is a serious measure aimed at addressing governance and financial integrity issues. It is part of a broader framework of accountability and oversight to ensure responsible use of public funds and delivery of services to citizens. Mr. Temporary Speaker, Sir, on the conversation around the stoppage of funds, allow me to emphasize what one of my Members, Sen. Okiya Omtatah had raised. That if you stop the flow of funds to counties because of an errant governor, you are punishing the masses. So, we must find ways of punishing errant persons. Article 225 (3) is a very lengthy process, but we can find a roundabout way of perhaps stopping the privileges and benefits that go to the ruling classes in counties, rather than stopping the flow of funds for medicine and other critical infrastructure to counties. In conclusion, I wish to thank the Members of the committee and the dedicated secretariat that usually sits for long hours to ensure we reduce the backlog of audit reports. The committee will continue to use various strategies, including subcommittees and merger of financial years, to shift to a more proactive mandate and to ensure the Senate is current in its interventions. Mr. Temporary Speaker, Sir, I would wish to report to the House that we are currently dealing with the next round of appearances that will go up to the financial year The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1408794,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1408794/?format=api",
"text_counter": 242,
"type": "speech",
"speaker_name": "Sen. M. Kajwang’",
"speaker_title": "",
"speaker": {
"id": 13162,
"legal_name": "Moses Otieno Kajwang'",
"slug": "moses-otieno-kajwang"
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"content": "2022. It is nothing to be proud of. Considering the backlog that we have had in the past, we pray that by the end of this session, we will be able to bring to the House reports up to the financial year 2023. I thank you."
},
{
"id": 1408795,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1408795/?format=api",
"text_counter": 243,
"type": "speech",
"speaker_name": "Sen. Wakili Sigei",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Thank you, Sen. M. Kajwang’."
},
{
"id": 1408796,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1408796/?format=api",
"text_counter": 244,
"type": "heading",
"speaker_name": "",
"speaker_title": "",
"speaker": null,
"content": "ACTIVITIES OF THE COMMITTEE ON COUNTY PUBLIC INVESTMENT AND SPECIAL FUNDS"
},
{
"id": 1408797,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1408797/?format=api",
"text_counter": 245,
"type": "speech",
"speaker_name": "Sen. Osotsi",
"speaker_title": "",
"speaker": {
"id": 13588,
"legal_name": "Osotsi Godfrey Otieno",
"slug": "osotsi-godfrey-otieno"
},
"content": "Thank you, Mr. Temporary Speaker, Sir. On behalf of the CPIC, I rise pursuant to Standing Order No.56(1)(b) to make a Statement on the activities of the committee for the period commencing 1st January to 15th April 2024. During the period under review, the committee had a total of 25 meetings within and outside the precints of Parliament to consider matters within its mandate. The meetings that we did include- (1) The regular meetings to consider the reports of the Auditor-General on the financial statements of special funds in counties for the financial years 2019/2020, 2020/2021 and 2021/2022. Mr. Temporary Speaker, Sir, this was a very important engagement because since this Senate was established, it had not considered the audited reports for funds. This was noted as one area where we have challenges with governance and accountability issues. (2) Multi-stakeholder engagement forum which was held in Mombasa County to address numerous cross-cutting issues in the water sector that were identified by the committee during its interrogation of the audit reports for water companies. We are in the process of doing a report which will be brought to this House on status of water investments or water entities in the counties. (3) We had a report writing retreat in Naivasha, Nakuru County. We went to write our report on the reports of the Auditor-General for water companies in our counties. In consideration of reports of the Auditor-General on funds in counties, we noted several issues. Upon conclusion of interrogation of the reports of the Auditor-General on the financial statements of public water companies in the counties for the financial years 2018/2019, 2019/2020 and 2020/2021, the committee resolved to embark on interrogation of reports of the Auditor-General on financial statement of funds in the counties for the three years. During the period under review, the committee met 23 county executives, those are governors and interrogated reports of the Auditor-General on 67 funds in the said counties. Some of these funds, include, among others, bursary funds, and disaster and emergency funds. That is what Members were talking about this afternoon. Others include car loan and mortgage funds and revolving funds. Those are some of the most common Funds in the counties. During the interaction with county executives on the audited reports on funds, numerous cross-cutting issues affecting the operations were identified. They included- The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1408798,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1408798/?format=api",
"text_counter": 246,
"type": "speech",
"speaker_name": "Sen. Osotsi",
"speaker_title": "",
"speaker": {
"id": 13588,
"legal_name": "Osotsi Godfrey Otieno",
"slug": "osotsi-godfrey-otieno"
},
"content": "(1) Most funds were established based on regulations drawn from the Public Finance Management (PFM) Act, 2012, which is a national legislation, raising concerns on the legality and effectiveness of the offices of the county attorneys. You can only generate regulations on national legislation if you are the Cabinet Secretary. Counties have no powers to generate regulations on a national legislation on their own. We noted that several counties have come up with regulations to manage Funds based on the PFM Act. We have had to give directions to the counties to regularize that and have a correct set of regulations in place. (2) Low recovery rate of loans advanced by revolving funds to beneficiaries, risking the continuity and sustainability of the funds. For example, Kitui Empowerment Fund had advanced loans amounting to Kshs150 million, but had only managed to recover Kshs3 million, raising concerns over its sustainability. There are many other counties like Trans Nzoia, Tana |River among others. As a committee, we need to decide on whether counties should continue having the so-called revolving funds. We noted that in some cases, these funds are used to distribute money to politically correct groups, especially during election period. We noted that several counties gave out money between the months of June and September 2022, which was an election period. Those loans have not been recovered to date. Most car loan and mortgage funds are advanced to county executive staff without securing the interests of the county by charging their assets such as land and vehicles. Most loans were given in an ad hoc manner. No security, no charging of property. This is a major loophole for pilferage of funds in our counties. Mr. Temporary Speaker, Sir, the fourth major observation, we had instances of multiple allocations of bursaries to a single beneficiary. There was also lack of acknowledgment of receipts by the benefiting institutions and cheques that remained unrepresented leading to stale cheques. When you look at the bursary fund and the way it is being managed in a county, you wonder why governors are putting money in bursary funds when bursary is a national Government function. Most of these monies cannot be accounted for. They cannot give a valid list of institutions where they gave bursaries or students who have benefited and there is no acknowledgment. In some of the counties, for example, Bungoma County, we had serious concerns and we have referred that matter to the EACC for further investigation. The fifth observation is that we have counties utilizing money allocated to emergency funds but failed to seek the necessary approval from the county assemblies as required under Section 114 of the Public Finance Management (PFM) Act 2012. We have a scenario where emergency funds are utilized and the governors do not go back to the County Assembly to regularize the approval funds for emergencies. That is common in most counties. In some counties we had instances where they have even overshot the threshold, giving out money more than the required threshold of two per cent. The sixth observation is on irregular inter-fund borrowing where money is moved from one fund to another without following the laid-down procedures. You find a The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1408799,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1408799/?format=api",
"text_counter": 247,
"type": "speech",
"speaker_name": "Sen. Osotsi",
"speaker_title": "",
"speaker": {
"id": 13588,
"legal_name": "Osotsi Godfrey Otieno",
"slug": "osotsi-godfrey-otieno"
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"content": "scenario where the County Executive inverts a fund, takes money away, borrows the money or money is borrowed from one fund to another. We saw a lot of that in most counties and this is un-procedural and another way of confirming that budget control and performance in most counties is very weak. The other observation is a high number of funds established by counties, limiting their oversight and capacity of counties to fund them and consuming a considerable amount of resources on administrative costs. That is money that could have been used for other meaningful purposes. For example, Baringo County has established a record 13 funds whereby some are not resourced. Some are not even operational. Some have inadequate funding from the county government while some are a duplicate of the other. The other major observation is the continuous resourcing of funds---"
},
{
"id": 1408800,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1408800/?format=api",
"text_counter": 248,
"type": "speech",
"speaker_name": "Sen. Wakili Sigei",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Sen. Osotsi, I wish to notify you that you have got under one minute to conclude your statement."
}
]
}