{"count":1608389,"next":"http://info.mzalendo.com/api/v0.1/hansard/entries/?format=json&page=152775","previous":"http://info.mzalendo.com/api/v0.1/hansard/entries/?format=json&page=152773","results":[{"id":1545932,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1545932/?format=json","text_counter":35,"type":"speech","speaker_name":"Sen. Kajwang’","speaker_title":"","speaker":{"id":164,"legal_name":"Gerald Otieno Kajwang","slug":"otieno-kajwang"},"content":"I do not know why they are jittery when I talk about the misdeeds of their governors. I will spill more."},{"id":1545933,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1545933/?format=json","text_counter":36,"type":"speech","speaker_name":"Sen. Kathuri","speaker_title":"The Deputy Speaker","speaker":{"id":13590,"legal_name":"Murungi Kathuri","slug":"murungi-kathuri"},"content":" I think it is because you said “finally”, yet they want to hear more, especially about their counties."},{"id":1545934,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1545934/?format=json","text_counter":37,"type":"speech","speaker_name":"Sen. M. Kajwang’","speaker_title":"","speaker":{"id":13162,"legal_name":"Moses Otieno Kajwang'","slug":"moses-otieno-kajwang"},"content":"Mr. Deputy Speaker, Sir, as I look at the other fiduciary risk, I will give examples of other counties. The other fiduciary risk identified by the PBO is pending bills. The total stock of pending bills as per the Auditor-General's report--- We have a problem because the Controller of Budget’s report does not agree with the Auditor-General's report. 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":1545935,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1545935/?format=json","text_counter":38,"type":"speech","speaker_name":"Sen. M. Kajwang’","speaker_title":"","speaker":{"id":13162,"legal_name":"Moses Otieno Kajwang'","slug":"moses-otieno-kajwang"},"content":"Sometimes, the county governments cannot tell you what the exact pending bill is because they have set up task forces, which review the work of previous task forces. Mr. Deputy Speaker, Sir, according to the reports of the Auditor-General, pending bills increased from Kshs163 billion in the prior year to Kshs179 billion in this financial year. Nairobi City County leads the pack with pending bills worth Kshs118 billion and Kiambu County follows with Kshs6.3 billion. Mombasa County has Kshs4.4 billion, Machakos County has Kshs4.1 billion and Bungoma County has Kshs3.5 billion. Yet, this House passed what we call the Ledama Motion that gave directives or directions to county governments on how to deal with pending bills. To date, we have not seen implementation of those very clear resolutions. Mr. Deputy Speaker, Sir, 24 counties have pending bills above Kshs1 billion. The problem is that they are not doing age analysis. This is because if you do age analysis, you will realize that some of the pending bills are five years and older. An example is Kirinyaga County, which had a pending bill stock of about Kshs1 billion. Out of it, Kshs500 million was five years old and above. This means that the governor has chosen to pay contractors in the current period. She has decided that the Ndathi contractors or the contractors of the previous administration will not be paid. Sometimes, governors say that they cannot and will not pay, forgetting that if there was someone with a valid claim who did work, they can go to court and they can force a charge against the county. That is why we said that the fiduciary risk in county governments far exceeds their revenue at Kshs500 billion because of mismanagement of pending bills. Mr. Deputy Speaker, Sir, the High Court sitting in Kitale made it clear that these task forces that are being established to review pending bills, Human Resources (HR), wage bills must go to their first port of call. The first port of call for each county governments is their internal audit function. Every county has an internal audit function and an audit committee. The Office of the Auditor-General is available. So, the High Court made it clear that those task forces are illegal. We have made that clear in our recommendations that we do not expect counties to set up task forces, but to use internal resources and also comply with the Senate resolution on settlement of pending bills. Let me move very quickly to another fiduciary risk that cuts across county governments. The Public Finance Management Act requires counties to demonstrate fiscal prudence. That means that wage bills should not exceed 35 per cent and development should be 30 per cent and above. Mr. Deputy Speaker, Sir, 16 county governments have wage bills in excess of 50 per cent. This is a clear violation of the Public Finance Management (PFM) and the Constitution, but every year we agree we send them more money because they give us excuses that they are former municipalities. They give us excuses that county governments came to provide jobs. The benchmark is 35 per cent. Do we deal with the law as it is, or the law as it ought to be? The law as it is, is that the ceiling should be at 35 per cent. As I said, we have 16 counties above 50 per cent. Kisii County leads at 60 per cent, Nyeri at 55 per cent, Nairobi City County is at 56 per cent, Mombasa County, 57 per cent, Laikipia County, 55per cent, Homa Bay 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":1545936,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1545936/?format=json","text_counter":39,"type":"speech","speaker_name":"Sen. M. Kajwang’","speaker_title":"","speaker":{"id":13162,"legal_name":"Moses Otieno Kajwang'","slug":"moses-otieno-kajwang"},"content":"County, 50 or 52 per cent. They are all abusing the requirements of the PFM. Can this House resolve that we stop transfer of funds for counties that cannot be fiscally responsible until they bring a recovery action plan as required under Article 225 and subsequent legislation? That is the decision of the House. We have made those recommendations. Could this House bring back the fiscal responsibility index in the formula for revenue allocation? We used to have a two per cent. Right now, only 11 counties are spending less than 35 per cent on wage bill. Why can we not give them a fiscal incentive so that others can also work towards achieving the same? Mr. Deputy Speaker, Sir, a further fiduciary risk that has been identified across all the reports is legal fees. It was in the headlines of yesterday's publications. I do not need to say a lot about it. Legal fees have become the new conduit for embezzling public funds. County governments are also not disclosing their contingent liabilities. So, you find that you step into office as a governor, you do not know what litigation is in court against the entity and someone just springs up with a court order. We have seen cases where people have sprung up with awards of one billion shillings and upwards. Mr. Deputy Speaker, Sir, in regards to this issue of legal fees, perhaps we need a multi-stakeholder approach. This is one area that I would be requesting that the accountability committees could sit together with the Justice, Legal Affairs and Human Rights Committee to get to the bottom of this rot and mess as far as legal fees is concerned. We have also cited issues of professional negligence. We have taken the position that if an accountant who is a member of the Institute of Certified Public Accountants and is in good standing prepares financial statements that are disregarded by the Auditor- General, that professional should not hold office and be reported to the relevant professional body for disciplinary action. That does not apply only to the accountants. There are other regulated professions like members of the Institute of Procurement, Institute of Human Resource Management and members of the Law Society of Kenya. We have made various proposals. You might see in the case of your county that we are recommending that those who prepare the financial statements should be disciplined by their professional bodies. Mr. Deputy Speaker, Sir, allow me to spend a minute to talk about systems used in county governments. We have a system called Integrated Financial Management Information Systems (IFMIS); that is extremely porous. IFMIS is an oracle-based system, the platform that runs major core banking software and huge e-commerce applications across the world. In Kenya, IFMIS is porous by design. People have built backdoors into IFMIS. County Government are using IFMIS more like a suggestion rather than as a rule. The PFM Act requires the National Treasury to define and prescribe a system of financial management for counties. Counties can use IFMIS and have accepted to use IFMIS even though they do not use it properly. However, they draw the line when it comes to revenue collection systems. They can use one system from the National Treasury for financial reporting. 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":1545937,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1545937/?format=json","text_counter":40,"type":"speech","speaker_name":"Sen. M. Kajwang’","speaker_title":"","speaker":{"id":13162,"legal_name":"Moses Otieno Kajwang'","slug":"moses-otieno-kajwang"},"content":"Mr. Deputy Speaker, Sir, when it comes to revenue collection systems, governors have decided that they do not want to be dictated to by the national Government because they want to buy their own little revenue collection systems that have algorithms that deposit money into their accounts. This House must resolve that the Auditor-General should do a special systems audit on the revenue collection systems across the counties. It came to our realisation that even as we are looking for a single revenue collection system, the Ministry of Information Communication and Technology (ICT) has built a system which currently Nairobi City County is using on a software as a service model. You do not have to spend Kshs70 million, which is the average cost of a system, to buy it. You are probably just renting space it sits on the cloud. Now, the National Treasury and Kenya Revenue Authority (KRA) are trying to build another system. I hope it will not cost Kshs104 billion like the one for the health authorities. We must provide guidance that the Office of the Auditor-General has the capacity and a systems audit department to bring to this House a proper systems audit. Sometimes, it is sad that a vendor is blacklisted in one county and they go to work in another. I do recall that there was such a vendor in Nairobi in the last Parliament. This Senate made a resolution that the vendor was not fit to do business with the county government. He rushed to the next county and is now doing business in that county. We must bring effect to debarment of service providers who occasion loss of public resources. Mr. Deputy Speaker, Sir, the weakness of these systems reflects also on poor own-source revenue collection. Almost all the counties were unable to meet their own- source revenue targets. There are so many stories, but the underlying one is the weakness of systems. There is also the aspect of non-collection of property rates. When you tell the governors in some parts of the country to prepare a valuation roll, they will tell you that the land tenure system is such that people would not want to pay more or investors would be frightened. Kiambu and Nairobi City counties have had a problem in terms of updating their valuation roll. However, from the reports we have, Kisii County is missing out on Kshs546 million due to uncollected rates. Kitui County is missing out on Kshs1 billion Kenya, while Kajiado County is missing out on Kshs11.9 billion in terms of rates that could have been collected. They do not even need to revise their valuation roll. They just need to apply the current one, even though some of these, are collections in lieu of rates. Therefore, this Senate needs to provide a way forward to help these county governments to collect those obligations. As I wind up to allow Members to debate, the other fiduciary risk that we have analysed is on imprests. By the closure of the financial year, Kshs318 million of imprest was not accounted for across the county governments. Kilifi County was leading with Kshs90 million unaccounted for in the hands of officers. Remember by the time these reports come to the Senate, it is six months after the close of the financial period. So, the officers run to the Senate with boxes showing surrender vouchers and warrants and we ask where those items were during the audit. 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":1545938,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1545938/?format=json","text_counter":41,"type":"speech","speaker_name":"Sen. M. Kajwang’","speaker_title":"","speaker":{"id":13162,"legal_name":"Moses Otieno Kajwang'","slug":"moses-otieno-kajwang"},"content":"Turkana County had Kshs85 million of unsurrendered imprest, Samburu had Kshs39 million of unsurrendered imprest, Mombasa County had Kshs25 million and Kakamega County, where Sen. Bonnie comes from, had Kshs18 million lying in the hands of officers and not surrendered. The PFM Act makes imprest management clear on who bears responsibility and we have made those recommendations. Mr. Deputy Speaker, Sir, some governors have made local arrangements in counties. Many county governments do not have audit committees and it seems to be deliberate because they do not want anyone to ask them questions. I think it was Kirinyaga County that appeared before us. The audit committee is non-existent. If there is no audit committee, the plans of the internal audit function cannot be approved because it is an audit committee that approves the plans of the internal audit committee. There were close to 11 counties that did not have functional audit committees and internal audit function. There were counties that did not have functional County Public Service Boards. Kisii County is one example where the former Chairperson of the Board became the Deputy Governor, after this House did what it did. So, the County Public Service Board is non-functional, they cannot recruit and sort out the many Human Resources (HR) issues that they have. Mr. Deputy Speaker, Sir, we also have talked about prior year issues. This is one of the issues that the Senate has gone to court over. If you do recall, Justice Jairus Ngaa made the ruling that Article 229(3) and (8) must be complied with strictly. However, the Senate went back to court for a judicial review, seeking administrative reliefs to allow us to deal with backlog. What we are doing today is compliance with the High Court's ruling. In fact, not just the High Court's ruling, but we are complying with what the Constitution requires us to do. We have had about 10 years of bad manners. Therefore, it would be responsible for the courts to say that if we did not comply over the last 10 years, that expenditure now should be water under the bridge. We must find certain administrative reliefs to enable us to hold to account those governors even in periods where the audit reports had not been considered. Mr. Deputy Speaker, Sir, in Uganda, they have put it in law. What happens when Parliament fails to consider the audit reports? The same way the county assemblies have failed because as I had mentioned, perhaps it was only Kakamega County Assembly that demonstrated to us at some point that they were up to date in consideration of the Audit- General reports. We have a problem with the rest. In Uganda, if six months lapse after tabling of the audit reports and Parliament does not take action, the audit report is adopted automatically. It is just like the way we treat statutory instruments. If Parliament does not take action on statutory instruments within the 14 days or within the duration prescribed, they become law. We will make recommendations that we need to amend our legislation and procedures to allow the audit reports to become law if Parliament fails to act. That should give us a window to be able to deal with issues from past financial years. I would like to come to a conclusion by making a few proposals on how we can do our work better. I must admit that with 2,300 pages, it is possible that we may not have captured certain issues with the precision and sharpness that is required. Even 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":1545939,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1545939/?format=json","text_counter":42,"type":"speech","speaker_name":"Sen. M. Kajwang’","speaker_title":"","speaker":{"id":13162,"legal_name":"Moses Otieno Kajwang'","slug":"moses-otieno-kajwang"},"content":"though we adopted this report by consensus as a committee, we do agree that some of the recommendations could be generic. Some of them could be fairly timid in nature. In some cases, we are calling for administrative action where it is clear that perhaps there was theft. In other cases, we are calling for regularisation of processes where the process was illegal ab initio. Mr. Deputy Speaker, Sir, I would like to encourage Members to look at their individual county recommendations so that we can after this adoption, look and tie them up and ensure that they are enforceable. We must also change certain aspects in our Standing Orders. If we are going to comply with Article 229, then this House must convene on the first week of January every year. Once we have received all the reports of the Auditor- General, so that they can be tabled and distributed to the various committees established to allow interrogation in the month of January, February and March. This year we had a problem and the House knows it. That the committee was constituted in February and we were in recess in January and February. So, my committee and that of Sen. Osotsi has had a very short time to deal with the issues that have come before us. However, if we plan well, I can assure the House that in the next audit cycle we will be able to bring a much more rigorous report to the House. Mr. Deputy Speaker, Sir, we are requesting the House in this case that most of our recommendations be based on written responses. The right to be heard is not necessarily the right to appear. I think that has been established. However, when you are relying on written responses, it is not possible to vouch for the authenticity of the records that are being tendered. In light of that, the committee and even the OAG cannot vouch for the veracity, authenticity and accuracy of the records that have been used to support some of the audit findings. We are asking the House to allow us to conduct a further inquiry to ensure that those records that have been submitted to us as evidence, meet the threshold. If they fail to meet the threshold, we are also asking that this House allows the committee to follow up with the relevant agencies; that is the Directorate of Criminal Investigations (DCI), the Ethics and Anti-Corruption Commission (EACC), the OAG, the Controller of Budget (CoB) and the National Treasury to take action on perpetrators of illegalities and irregularities that have been documented in this audit report. Mr. Deputy Speaker, Sir, we are also calling upon county assemblies not to abandon their primary oversight mandate. We will make detailed proposals on statutory amendments. In my view, some of my colleagues have thought, why do we not amend Article 229 of the Constitution? I do not think we should amend the Constitution. In my opinion, we should try to live up to the high expectation of the Constitution. That means changing statutes, procedures and Standing Orders. It is possible for Parliament to be up to date. When I became the Chairperson of the Senate Standing Committee on Public Accounts, I took over from Sen. Bonnie Khalwale. For two or three financial years, he was fighting with governors in court, corridors, media and committee rooms. They had refused to come. Again, because of this 31st March constitutional deadline, the governors have refused to appear before my committee. Only four of them have come. The rest 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":1545940,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1545940/?format=json","text_counter":43,"type":"speech","speaker_name":"Sen. M. Kajwang’","speaker_title":"","speaker":{"id":13162,"legal_name":"Moses Otieno Kajwang'","slug":"moses-otieno-kajwang"},"content":"have decided that they will file written responses. However, what the Constitution requires us to do by 31st of March is to debate, consider and take appropriate action. I am calling upon the House. As far as appropriate action is concerned, the right thing to do is to treat this as our interim recommendation, but the detailed analysis and detailed enquiries can still be pursued by the relevant committees with a view to following up on implementation as required by the Public Audit Act. That is our prayer to the House, I just want to finalise by thanking all the stakeholders who contributed, particularly the PBO, for producing the second version of the Fiduciary Risk Report. The first version was compiled by the PBO, but I would say it was largely authored by Sen. Olekina who was my colleague in the CPAC. I want to thank the PBO, the staff and the clerks in my committee who are some of the most hardworking clerks, because I have seen them deliver a 2,000-page document at short notice. I also want to thank our stakeholders, the National Treasury, the EACC and the members of my committee as well as the House for showing confidence in us and for allowing us to carry out this critical and sensitive function. I beg to move and I beg that the House consider our prayer that we follow up on the residual matters within an implementation framework. Also, we cause and compel the appearance of governors who think that they only need the Senate when it comes to allocating money and does not need the Senate when it comes to accounting for the money. I beg to move and I would request my Vice-Chairperson, Sen. Mwaruma, to second. Thank you, Mr. Deputy Speaker, Sir."},{"id":1545941,"url":"http://info.mzalendo.com/api/v0.1/hansard/entries/1545941/?format=json","text_counter":44,"type":"speech","speaker_name":"Sen. Kathuri","speaker_title":"The Deputy Speaker","speaker":{"id":13590,"legal_name":"Murungi Kathuri","slug":"murungi-kathuri"},"content":" Sen. Mwaruma, proceed."}]}