City Hall did not declare a staggering Sh18.46 billion in own-source revenue in three financial years between 2016 and 2019, a Senate watchdog committee heard on Monday, opening the lid on how billions of shillings collected in Kenya’s capital may have ended in private hands.
County government auditors, appearing before the Senate County Public Accounts Committee, revealed the existence of huge variances between revenue records provided in financial statements and those extracted from the cash office.
According to the Auditor-General, the Nairobi County government should have reported Sh19.74 billion as annual revenue in the financial year ending June 2018. The amount is based on daily revenue summary records from the cash office.
However, the county only declared Sh10.1 billion in its official financial statements for the fiscal year, hiding Sh9.64 billion.
The following year City Hall again under-declared their revenues by Sh3.87 billion when only Sh10.1 billion was declared against Sh13.97 billion gleaned from records by the auditor.
In the financial year ending June 2017, the county government also under-declared its revenue by Sh4.95 billion.
During the fiscal year, City Hall declared Sh10.9 billion as its own-source revenue against what records showed was Sh15.85 billion.
The shocking revelations touch on the last financial year of former Governor Evans Kidero and the beginning of his successor Mike Sonko’s tenure.
“We probed the system and the figures extracted from records from the cash office they had given vis a vis what was declared in the financial statements presented huge variances,” the auditor told the committee.
Consequently, the committee called for a forensic audit of the county government’s revenue to explain the anomalies.
This comes at a time when the county has been struggling to meet its revenue targets and pay pending bills.
The committee is currently considering audit reports for the county government for three fiscal years from the financial year ended June 2017 and 2019.
The committee chairperson, Moses Kajwang, raised concerns that despite several initiatives at automating revenue streams and engaging different revenue collectors like JamboPay, National Bank, and the Kenya Revenue Authority, the annual collection has stagnated at an average of Sh10 billion.
Mr Kajwang, the Homa Bay Senator, ordered that the special forensic audit be conducted within three months and a report submitted before the committee.
“We want to assure the country and Nairobi residents that you are not collecting revenue and pocketing because reports have seen variances in what is collected and what is reported,” said Mr Kajwang’.
“We want to illustrate that people have been pocketing the money or faithfully reporting the same.”
Nairobi Senator Edwin Sifuna challenged the current governor, Johnson Sakaja, to seal the loopholes for revenue leakages.
Mr Sakaja said his administration has now fully automated its 170 revenue streams to stop human interaction with cash to reduce revenue leakages.
He also pointed out that they have put in place a single payment system known as NairobiPay.
“We have also established Nairobi Revenue Authority to manage the county’s revenue,” said the governor.
Several reports, including from the Commission on Revenue Allocation, have indicated that Nairobi can collect Sh25 billion annually and has a potential of Sh67.7 billion if all revenue streams are automated and a new valuation roll is implemented.