Tharaka Nithi County did not spend sh111,700,000 which was transferred to the health docket in the financial year 2013/14 yet the county needs these urgent services. According to information from the Auditor General’s report, these funds were meant for the development of different health centers. However at the closure of the 2013/2014 financial year,
the fund had not been spent and neither was it repaid to the county revenue fund or a refund statement was prepared in regard to the fund.
Information from the County’s website states that the county intends to have
- Ultramodern medical care
- Diseases diagnostic centres
- Ultrasounds and scans centres
- Emergency Services
- Morgue services
- Private clinics and care centers
- Wellness centres and advisory.
- Physiotherapy and community health services.
Recently, Tharaka Nithi Governor Samuel Ragwa launched a sh120 M health project which will see 54 health centers in the county get funded for construction of crucial facilities. Ragwa said that the facilitation would include construction of wards, maternity wings, laboratories, staff quarters and other facilities that will see smooth running of the health centers.
Located in Kenya’s former Eastern Province, the county has an area of 2409 km² and had a population of 365,330 as of the 2009 census.
While it is not clear whether the Governor’s launch financial details are the same as what the Auditor General’s alluded to not having been spent as the amounts involved are the same, perhaps the county’s inability to show whether they have already spent it, partly or otherwise raised the red flag during the audit process.
In addition, the Auditor General’s report states that County failed to produce ledger accounts and other statutory reports. The report says
expenditure returns made available for audit indicated that the County Executive incurred an expenditure of sh884,882,885 as at 30 June 2014. However, no monthly ledgers to support the expenditure in respect of recurrent and development votes were provided.
The county was also using two systems of accounts
Further, the County Treasury was using the manual vote book and the Integrated Financial Management Information System (IFMIS) concurrently. The two accounting systems in use did not produce ledger accounts, trial balances, statutory control reports, detailed head/item analysis and AIE expenditure statements complete with grouping of accounts codes in to the prescribed bands as required by Section 5.11.3 of Government Financial Regulations and Procedures.
The Auditor General further reveals that the recurrent expenditure reflected in the expenditure returns exceeded the IFMIS vote books by sh474,107,183 while the development expenditure in the IFMIS vote book exceeded the expenditure returns amount by sh48,047,353.
On expenditures, the county could not account for over sh100m. This includes sh56,785,505 of unauthorized expenditures, sh46,402,882 of unaccounted for expenditures and shs12,813,910 of unsupported expenditures.
Tharaka Nithi County Executive flouted procurement rules by buying vehicles without subjecting them to an open tender system.
The County Executive procured motor vehicles worth sh41,881,755 from a firm in Nairobi, using direct procurement method. No reasons were provided for the departure from the open tendering procurement method required by Section 62 of the Public Procurement and Disposal Regulation, 2006 (Revised 2013).
Other procurement related anomalies by the county included a total of sh3,645,960 incurred for study tour in Israel for without showing evidence of competitive sourcing, sh11,083,050 expenditure for various water services without pre-qualifying the goods providers and irregular procurement of media equipment worth sh6,614,750 among others.
The county also has poor revenue records and under-collection of revenues. During the period under review, three sub-counties had collected a total of sh29,556,206. However, a comparison of these collections to the actual banking made to the Tharaka-Nithi Revenue Account revealed that the revenue had been under banked by sh2,125,947 which the Auditor says needs to be investigated.
In addition, the audit says that uncollected revenue amounting to sh27,188,236 was outstanding as at 30 June 2014. It was further noted that these arrears were not disclosed in the notes to the financial statements. Strikingly, the audit adds
under collection of revenue comparison of revenue collected between July 2012 and March 2013 and July 2013 and March 2014 in the sub counties of Chuka Igamba Ngombe and Chuka Urban revealed an under collection of revenue in the year 2013/2014 totaling sh9,040,063.
Moving forward, Auditor General Edward Ouko recommends that the county needs to adhere to various legal regulations. These include the Public Procurement and Disposal Act, 2005, Public Finance Management Act, 2012 and Government Financial Regulations and Procedures.
The management should enhance accountability in the management of the public funds by ensuring that the accounting system in place is effective and efficient. The County Executive should request the National Treasury to second experienced accountants to assist the county staff in setting up a proper accounting system in accordance with Section 14(1) of Public Finance Management Act, 2012.
In addition the reports calls for differences noted between the IFMIS and expenditure returns should be reconciled and explained appropriately
Finally, and what is coming out clearly in all government institutions, the Auditor General is urging that the necessary reports and accounting statements should be easily produced by the system to enhance Financial Management of the County Executive.