Kenya: Edward Ouko Casts Doubt on City Hall Over Sh305 Billion Rates

8 November 2018

The Auditor-General Edward Ouko has faulted the Nairobi City County government for failing to put in place adequate measures to collect and clear all the outstanding rates that run into billions of shillings.

Mr Ouko's report for 2016/17 Financial Year shows by mid last year, the county had an outstanding rates of Sh305.4 billion which is equivalent to 99 percent of the total outstanding accounts receivables.

In the report, which was tabled by the Majority Whip Susan Kihika in the Senate, Mr Ouko casts doubt on the county government, arguing the likelihood that it can collect the outstanding rates from defaulters appears to be too low.

This is indicative of significant impairment on the outstanding rates balance of Sh305,367,800,145 as of June 2017.

Further analysis of the outstanding rates balance has not been made available for audit review," Mr Ouko says.


Similarly, the report notes that the supporting schedules for wayleave fees balance of Sh752 million were not presented for audit review while a 100 percent movement of urban development debtors from Sh79.4m from June 2016 to a nil balance in last year was not explained.

The audit further established that the statement of receipts and payments reflects payments totalling Sh24.9 billion.

However, 18 expenditure items, totalling Sh7.9 billion included in the financial statements differs with the ledger figures totalling Sh6.1 billion for the items.

"The resulting difference between the ledger and the financial statement has not been reconciled or explained and in the circumstances the accuracy of reported Sh24.9 billion cannot be confirmed," the report says.

Again, while the statement of receipts and payments reflects an expenditure of Sh1.7 billion in respect of acquisition of assets, a comparison of the balance presented against the Integrated Financial Management Information System (IFmis) payments report against the bank statements revealed that most of the payments were not reflected in the bank statements, making it hard for the accuracy of acquisition of assets.

The report shows that the county had revenue of Sh10.9 billion, out of which Sh7.9 billion was collected through Jambo Pay.

But it was not clear how much Jambo Pay deducted from the revenue as vendor's fees which should be 4.5 percent.

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