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"speaker_name": "Sen. M. Kajwang’",
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"content": "We had a few challenges before I get to the content of the report that is before us. We have two reports. One report is about 2,300 pages long. It is a detailed report of audit issues identified in each county government. It contains the observations of the Auditor- General, the response of the management, and the recommendation of the Senate. However, the more useful report that I would wish to direct the Members of the Senate to is a 200-page fiduciary risk report, a detailed report that summarizes all the risks that were identified by the Auditor-General in the FY2023/2024. This report in terms of drafting and authorship, was led by the Parliamentary Budget Office (PBO), a directorate within the institution of Parliament that is well equipped with fiscal analysts to be able to advise committees of the House on fiduciary and fiscal matters. Hon. Members, as we follow this Motion, I want to urge you that the 200-page fiduciary risk report gives a global view. However, the 2,000-page detailed report, you probably might be interested in going to the section where the issues from your county have been listed. In terms of methodology, the committee sought responses from all the entities where the Auditor-General had submitted an audit report. A few entities were invited for physical interrogation and enquiry. Unfortunately, most of the entities that we invited for the physical interrogation chose not to appear and they sent letters of regret. Nonetheless, we went ahead to consider their written response. There are a few entities that chose not to appear and chose not to respond. We took that to be contemptuous of the role of Parliament. The list of shame of counties that failed to respond, failed to appear, and gave frivolous excuses for that action include Isiolo, Kajiado, Baringo and Marsabit. Nyamira County appeared, but they did not satisfy the documentation requirements of the committee. So, it was deemed to be an unperforming appearance. Mr. Deputy Speaker, Sir, part of the prayers we are making in this detailed report, which I will summarise at the end, is that these counties that were invited, they failed to appear and file written responses, that the House directs that CPAC issues summons to compel their appearance. It cannot be that they require us when it comes to the appropriation of funds to counties, but they show us the middle finger when it comes to accounting. The whole of this morning, this Senate has been debating on how we will stand up to the National Assembly to send more than Kshs52 billion to the counties. We play our part to send money to the counties. The governors and chief executive officers must play their part in ensuring that there is accountability for those resources. This process that we are doing ideally should be happening at the Senate and in each of the 47 county assemblies. The Constitution has given us a concurrent mandate or jurisdiction. In fact, the timeline of three months is shared between the county assembly and the Senate."
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"content": "(Sen. Cherarkey stood at the Dispatch Desk and consulted the Clerk-at-the-Table)"
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"type": "speech",
"speaker_name": "Sen. M. Kajwang’",
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"speaker": {
"id": 13162,
"legal_name": "Moses Otieno Kajwang'",
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"content": "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."
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{
"id": 1545925,
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"type": "speech",
"speaker_name": "Sen. Kathuri",
"speaker_title": "The Deputy Speaker",
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"id": 13590,
"legal_name": "Murungi Kathuri",
"slug": "murungi-kathuri"
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"content": " Sorry, Sen. M. Kajwang’. Sen. Cherarkey, please familiarize yourself with Standing Order No.117. You should not stand between the Senator speaking and the Chair. If you need to consult about those documents, please carry them to your seat."
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"content": "(Sen. Cherarkey proceeded to take his seat.)"
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"id": 1545927,
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"type": "speech",
"speaker_name": "Sen. M. Kajwang’",
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"speaker": {
"id": 13162,
"legal_name": "Moses Otieno Kajwang'",
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"content": "Thank you, Mr. Deputy Speaker, Sir. The county assemblies ought to have considered all these reports because primary oversight is exercised at the county assembly level. In our consideration of the reports, we did not come across any county assembly that had already considered the reports. It would appear as if our brothers and sisters in county assemblies have absconded their primary oversight role to the Senate. Part of the recommendations we are making is on how the Senate can help build the capacity of county assemblies to be able to be the first line of oversight. In terms of findings, the PBO tells us that the fiduciary risks that counties face can be quantified, and it has been quantified to Kshs532 billion. I know you will wonder, the annual transfer to counties does not get to Kshs532 billion. How is it that counties face fiduciary risks of that amount? If you look at that fiduciary risk report, there is a schedule that breaks down fiduciary risks faced by every county government. I want to ask members to take an interest and go to the section that lists the fiduciary risks faced by your county government. Mr. Deputy Speaker, Sir, fiduciary risks are not just issues that come out of budget, but they are risks that the county faces like litigation, unsettled liabilities like pending bills, contingent liabilities, legal fees and assets that have not been properly identified. So, there is a risk that those assets could get lost. What the PBO has told us is if county governments were to be grouped together as a commercial entity, then they would be technically insolvent because in terms of potential liabilities, it far outstrips the potential assets that they have. So, the fiduciary risk faced by county governments as at 2023/2024 amounts to Kshs532 billion against an annual transfer of Kshs400 billion. Mr. Deputy Speaker, Sir, when we come to the specific issues of misappropriation of public resources, the analysis of the PBO tells us that in that financial year, the Auditor-General queried Kshs 87 billion. Now, Kshs 87 billion in a financial year is probably 24 per cent of the money we send to counties. The Auditor-General tells us that 24 per cent of the money we are sending to counties is being misused. The specific issues that underpin the Kshs 87 billion is irregular expenditure, that is, things like penalties and fines, Kshs 9.5 billion expenditure that is avoidable and unaccounted expenditure of Kshs157 million. It is a sad day that in the morning we were struggling to send Kshs 52 billion to county governments and this afternoon we are looking at a report that is telling us that Kshs 87 billion that the Senate sent to county governments cannot be properly accounted for. Mr. Deputy Speaker, Sir, I will give you a few examples. The irregular expenditure of Kshs39 billion in Marsabit County. Marsabit County spends Kshs Kshs16.5 million on insurance for vehicles that are grounded. A figure of Kshs16.5 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": 1545928,
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"type": "speech",
"speaker_name": "Sen. M. Kajwang’",
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"content": "million would probably sink eight wells. However, they paid that for insurance and the vehicles are not moving. That is in the report. Nairobi City County spends Kshs146 million to pay salaries for former Nairobi Metropolitan Service (NMS) staff after expiry of their contract. Further, Kilifi County paid Kshs71.5 million to legal firms without proper authorization. Kilifi County went ahead and paid Kshs13.1 million for upgrade of Shanzu Law Courts yet county governments are separate and independent. Mr. Deputy Speaker, Sir, why would you spend that on the law court? Wajir County spends Kshs25.9 million on classrooms in primary and secondary schools yet our brothers and sisters in the National Assembly have money for building those classrooms through the National Government Constituencies Development Fund (NG-CDF). All that put together, the counties, the country and the citizens of Kenya have lost Kshs 39 billion. The number could have been higher if the PBO had quantified the issue of bursaries, which counties continue to give out, yet it is a function that should be domiciled at the national Government. The Auditor-General has flagged Kshs49.7 billion, expenditure that cannot be justified. She has been in the county for six months, but the entities cannot provide supporting documentation. Some of them attempt to carry cartons of records, invoices and vouchers to the Senate. We have taken the position that if you could not justify the expenditure when the auditor is on the ground, then my committee and my colleagues are not auditors. We will not accept some of those things because some of them are cooked. Mr. Deputy Speaker, Sir, other examples of unsupported expenditure include Mandera County which spends Kshs148 million to purchase pharmaceuticals and yet they cannot provide the supporting evidence. I thought that was the easiest thing to do. If you purchase pharmaceuticals, be it from KEMSA or MEDS, the documentary trail is there. Therefore, when the auditor comes, you should provide it to them. Mandera County spends Kshs45 million on legal fees without providing justification or providing the reasons for that. Kilifi County spends Kshs888 million without supporting documentation. Marsabit County used Kshs599 million and Uasin Gishu used Kshs414 million, respectively without supporting documentation. Mr. Deputy Speaker, Sir, let us call it what it is; that is theft. If the records cannot be found when the Auditor-General is on the ground, six months later, this House sanitizes theft and crooked behaviour in counties. We have brought a report to the House saying that this is unacceptable and action must be taken. There is also loss of money through unbudgeted expenditure. Budgets are sacred documents because it is a commitment between the governors and the people they govern. It is supposed to be exercised through the county assembly. Nairobi City County spent Kshs13 billion without a budget. Kshs13 billion and you know, you ask yourself, where would the assembly be if there is such a huge budget variation? A figure of Kshs13 billion is probably 30 per cent of Nairobi' City County’s budget. Embu County has Kshs448 million unbudgeted for. In Nyamira County, the governor told us yesterday that the assembly is split in the middle. You have two speakers, two clerks, two maces. One assembly sits in the 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": 1545929,
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"type": "speech",
"speaker_name": "Sen. M. Kajwang’",
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"speaker": {
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"content": "assembly chamber, another one sits under a tree and says that it is assembly mashinani. The governor chooses to send his budget to the assembly that sits under a tree and not the assembly that sits in the assembly precincts. Mr. Deputy Speaker, Sir, this is madness and I think that Kenyans have been tolerant for too long. We now need to send out very strong messages and strong recommendations on this. Another wasteful means of spending public funds is what the accountants call negatory expenditure. As I said earlier, negatory expenditure is avoidable expenditure, penalties, interests and fines. The county spent 1.7 billion on penalties and fines that could have been avoided. Those are penalties and fines to CPF, LAPTRUST and LAPFUND. Kiambu County spent 414 million on penalties and interest. I wish the House could direct that where a county government incurs penalties and interests that are avoidable, then the accounting officers should be surcharged personally. This is because some people just sit on invoices, they sit on court orders and on statutory contributions and wait for the interest to pile. A figure of Kshs1.7 billion could do so much instead of lining up the pockets of these fund managers because of interest. Finally, these are what I call outright illegalities, an accounted expenditure. The analysis of the PBO is that unaccounted expenditure in that year was Kshs157 million. Unaccounted expenditure is what it is. It is money that has left the county, but there is nothing to show for it. A figure of Kshs76 million from Tharaka Nithi was charged on the retention account, but there was no evidence that it was used to settle retention and deposits as required by law. A figure of Kshs37 million from Tana River was used on fuel and motor vehicles, but there was no evidence of the vehicles having been bought. Wajir County used Kshs18 million to buy laptops and printers, but there was nothing to show. Isiolo County used Kshs17 million to buy equipment for an emergency unit, but there was nothing to show. We must call it what it is; it is theft. It is across the board, hon. Senators. I want you to look at those reports and you will be able to see what is going on. Mr. Deputy Speaker, Sir, the other fiduciary risk---"
},
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"speaker": null,
"content": "(Loud consultations)"
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"text_counter": 34,
"type": "speech",
"speaker_name": "Sen. Kathuri",
"speaker_title": "The Deputy Speaker",
"speaker": {
"id": 13590,
"legal_name": "Murungi Kathuri",
"slug": "murungi-kathuri"
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"content": " Order, hon. Senators!"
}
]
}