The Nairobi County Assembly finds itself under the gimlet eyes of the Auditor-General after it was discovered that it had frittered away more than KSh 67 million in legal payments without proper documentation or adherence to public procurement rules.
- •According to the OAG’s Blue Book, the Assembly disbursed KSh 62.5 million to 18 legal service providers and an additional KSh 5.3 million to unnamed entities.
- •The report also noted that there was no evidence showing how these providers were identified or selected as required documents such as contracts, procurement records, and engagement justifications were missing at the time of the audit.
- •The County Assembly’s legal expenses were part of a broader KSh 97.7 million allocation under “other operating expenses.”
The report highlighted that the lack of transparency around these payments raised serious concerns about compliance with Kenya’s public finance management laws, particularly regarding the use of competitive processes and adequate documentation in the procurement of professional services.
The irregularities come against a backdrop of persistent fiscal strain. The Nairobi County Assembly ended the financial year with KSh 513.9 million in pending bills, including KSh 302 million owed to suppliers and KSh 211 million in staff-related payables. The audit attributed the accumulation of arrears to liquidity challenges and insufficient budgetary allocations.
“Failure to settle bills during the year in which they relate distorts the financial statements and adversely affects the budgeted provisions for the subsequent year as from a first charge,” the Auditor-General said.
Beyond financial improprieties, the report identified structural weaknesses in the assembly’s internal oversight. The financial statements for the period reveal significant discrepancies in asset management. Despite a recorded historical cost of KSh 366.9 million for non-current assets, key items such as loose furniture, floor carpets, and digital equipment were not properly tagged or reflected in the asset register.
Additionally, concerns arose over the procurement process for a bulk SMS system, which amounted to KSh 1.8 million under the goods and services expenditure. Although the procurement plan reserved the contract for youth-owned enterprises, the awarded company lacked the required AGPO certificate, violating procurement guidelines.
Payroll audits revealed that twenty individuals — including 15 Members of the County Assembly — exceeded legal deduction limits, contravening the Employment Act, 2007. The Management also allowed salary check-offs for loans that left employees with less than one-third of their basic pay, exposing them to financial vulnerability.
Compounding these missteps, the County Assembly spent 46% of its total revenue transfers on salaries — 11 points above the statutory ceiling — undermining fiscal responsibility principles. Together, the violations paint a troubling picture of governance failures and disregard for public finance regulations.
The Auditor-General issued a qualified opinion on Nairobi’s financial statements, indicating that while some records were materially correct, significant concerns remained that undermined the reliability of the Assembly’s financial disclosures.
