City Hall officials failed to disclose the existence of seven bank accounts to the Auditor-General’s office during the transition period, putting to doubt the accuracy of cash balances supposedly held by the Nairobi county government.
In his report covering eight months up to February 2013, Edward Ouko said that supporting documents including cashbooks, bank reconciliation statements and cash balances were not made available for audit verification.
“The council did not disclose seven bank accounts, five of which were held with the Co-operative Bank and two were held at the Kenya Commercial Bank,” Mr Ouko said.
Of the bank accounts that City Hall produced, some had no key documents like cashbooks, further putting the amounts listed in the financial statements to doubt.
“The financial statements for the period ending February 28, 2013, reflect cash and cash equivalents amounting to Sh563 million. However, records made available for audit review on bank account balances revealed that the council operated 31 bank accounts, out of which the council did not produce cashbooks for 12 accounts,” said Mr Ouko.
“In the circumstances, it has not been possible to confirm the accuracy of cash and cash equivalents balance of Sh563 million as at February 28, 2013.”
The report shows multiple cases where the law was ignored, putting county assets in danger and taking on unexplained debts.
In one instance, City Hall is said to have taken up a Sh1.8 billion overdraft for which it could not produce finance committee minutes or the minister’s approval for the facility.
“The council was therefore in breach of financial regulations and the need for this overdraft could not be ascertained.”
The county is also faulted for lack of a fixed assets register which also makes it very hard to verify the value of its non-current assets which was set at Sh9.6 billion by the end of the period.
In a recent submission to the Public Accounts Committee, County Secretary Lilian Ndegwa said that the county was in the process of establishing comprehensive asset schedules.
Mr Ouko also raised the red flag over the loose manner in which the city’s land is held, pointing out that of the 428 properties recorded in a schedule submitted to his office, 129 did not have land reference numbers while the sizes of 234 were not indicated.
Governor Evans Kidero has indicated that the county is in the process of recovering land grabbed due to lack of legal security for City Hall properties.
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