Nearly half of civil servants default on State houses rent

Nearly half of civil servants occupying government houses do not pay rent as required, a new report tabled in Parliament shows.

Auditor-General Nancy Gathungu says rent collections on government houses for the year to June 2020 was Sh724.3 million out of an annual rent potential of Sh1.5 billion when fully occupied.

Ms Gathungu said the State Department for Housing recorded a shortfall of Sh800.3 million or 52 percent of the rent collection potential.

“The Department failed to put in place measures to ensure that all rent income due was collected in accordance with Regulation 43(c) of the Public Finance Management (National Government) Regulations, 2015 which requires an Accounting Officer to ensure that all Appropriations-In-Aid due to a national government entity are collected and properly accounted for in accordance with the relevant laws, rules and regulations,” Ms Gathungu said.

The report shows that total number of government houses across the 47 counties stood at 56,892 houses with an expected monthly rental income of Sh127,048,750 resulting into an annual rent potential of Sh1,524,585,000 assuming full occupancy.

“For the government houses occupied by the county governments’ staff, deductions totaling to Sh113,409,750 were made through the respective payrolls but only a total of Sh16,377,978 was remitted to the State Department for Housing resulting into unremitted revenue of Sh97,031,772 as at June 30, 2020,” she said.

Ms Gathungu says the government house rents were last reviewed in the year 2001 or 20 years ago and are therefore not aligned to current market rent rates.

“This is despite the civil servants’ house allowances having been reviewed severally to reflect the cost of living and the market rates for the rent.

“Consequently, the government is losing out on revenue with the continued application of outdated rental rates,” she said.

Ms Gathungu said the register of the 56,892 houses maintained by the State Department did not contain key information such as the dates of occupancy and vacancy, occupants’ details and reason for non-occupancy.”

“Failure to maintain a comprehensive register makes it difficult to keep track of government houses and tenants in relation to occupancy, vacancy of the houses, houses with rent arrears and their respective maintenance costs,” Ms Gathungu said.

She said the Department of Housing had failed to develop and roll out policies or guidelines to manage the allocation of vacant houses in the various counties.

Ms Gathungu said the benefits that accrue with digitisation such as ability to establish expectation on rental income from ministries, departments, agencies or counties, invoicing, rent collections, booking of revenue, reconciliations and maintenance of houses have not been realised.