Economy

Governors ‘illegal’ secretariat made Sh2bn payouts — audit

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Former Auditor- General Edward Ouko. FILE PHOTO | NMG

The secretariat of the Council of Governors (CoG) is on the spot for authorising Sh2 billion expenditure on several contracts in the past three years.

The Auditor-General’s report shows that whereas the CoG is a creation of Section 19 of the Inter-Governmental Technical Relation Act, 2012, the law does not recognise the existence and function of a CoG secretariat.

“In view of the foregoing, the legality of the CoG secretariat, the propriety and legality of payments made by the CoG secretariat and the validity of the contracts entered into by the secretariat could not be confirmed,” the report signed in August by former Auditor- General Edward Ouko states.

The report put the CoG secretariat on the spot for spending Sh196.9 million in the year to June 2018.

It was tabled in Parliament last week and shows that the secretariat inflated the cost of leasing eight floors at Delta House in Westlands, Nairobi by more than 40 percent per square feet.

“The valuation undertaken by the Ministry of Lands, Housing and Urban Development indicates that the rental values of Sh100 per square feet but the rental charges to the CoG were at a rate of $1.40 per square feet which is 40 percent above market rates,” Mr Ouko said

The report, tabled by Leader of majority Aden Duale says no explanation was provided for documentation of the contract in United States dollars (US$) and the use of higher rental charge compared to the government advised market value.