Isiolo Governor Abdi Guyo is on the spot for creating unlawful employment positions after hiring 36 advisors, the highest in the country.
The appointments are against the Salaries and Remuneration Commission (SRC) recommendation of four.
According to a report tabled before the Senate County Public Accounts Committee, the Auditor General established that 47 per cent of the county budget is spent on wages, denying the residents of Isiolo services and development.
Isiolo Governor Abdi Guyo appearing before the parliamentary committee.
Governor Guyo was also questioned over the hiring of 31 chief officers, exceeding the approved number of 18.
It was further revealed that each County Executive Committee member had five chief officers, each earning a monthly salary of Ksh255,000.
The Auditor General had raised 35 issues regarding the Financial Statements of Isiolo County Government for the Financial Year 2023/2024. The county Government has since responded to 18 of the 17 charges.
The session was also temporarily halted after the county boss who denied all the allegations was locked in a war of words with the county senator, Fatuma Dullo.
The committee, chaired by Homa Bay Senator Moses Kajwang, has recommended that the Ethics and Anti-Corruption Commission (EACC) investigate a contract for the development of the Isiolo County spatial plan amounting to Ksh98.5 million, shunning the lowest bidder who had quoted Ksh62.1 million.
The lowest bidder was disqualified because the quotation was low and they would potentially fail to deliver the contract.
The county boss was fined Ksh500,000 for failing to appear before various senate committees on several occasions.
Under the leadership of Governor Abdi Guyo, Isiolo County has been marred by corruption and poor governance.
The recent financial audit of the county’s operations reveals a disturbing pattern of economic mismanagement, illegal practices, and a lack of accountability.
This article sheds light on the serious discrepancies and irregularities in the audit report.
Financial Discrepancies and Mismanagement
The audit report highlights numerous inaccuracies in Isiolo County’s financial statements for the fiscal year 2022-2023.
There are significant unexplained variances between the budgeted and actual figures.
For instance, the county’s budget statement shows budgeted revenue of Kshs 5,223,402,709, matching the actual receipts.
However, a closer examination reveals that the county actually realized only 97.75% of its revenue projections, amounting to Kshs. 6,316,282,100, against the approved target of Kshs. 6,461,031,197.
This results in an unexplained shortfall of Kshs. 1,092,879,391. There are also inconsistencies between the reported total receipts and payments.
The financial statements reflect total receipts of Kshs. 5,223,402,709 and total payments of Kshs. 4,849,600,633, whereas another statement lists these figures as Kshs. 5,848,704,848 and Kshs. 5,446,853,315, respectively.
This discrepancy amounts to an unexplained variance of Kshs.625,302,139 in receipts and Kshs.597,252,682 in payments.
These financial misstatements raise serious questions about the integrity of the county’s financial reporting and the transparency of its fiscal management.
Unsupported and Irregular Expenditures
The county’s statement of receipts and payments includes unsupported and irregular expenditures.
A glaring example is the transfer of Kshs. 1,501,486,520 to other government entities, which is not reconciled with the cash flow statement showing only Kshs. 904,233,838, leading to an unexplained difference of Kshs. 597,252,682.
Furthermore, the audit report reveals that compensation for employees includes Kshs.90,275,000 for temporary employees, but the expenditure ledgers only reflect Kshs.83,520,000, creating an unreconciled variance of Kshs.6,755,000.
Additionally, the statement of cash flows indicates a net increase in cash and cash equivalents of Kshs.999,104,215, while the actual net difference is only Kshs.764,615,509, resulting in an unexplained variance of Kshs.234,488,706.
These irregularities indicate potential misuse of funds and lack of proper financial controls.
Violation of Public Finance Management Act
Governor Abdi Guyo’s administration has also violated the Public Finance Management Act.
The county made payments amounting to Kshs. 168,128,800 from the emergency fund, exceeding the legal limit of 2% of the county’s previous year’s revenue.
This action breaches Section 113 of the Public Finance Management Act, 2012.
Moreover, the county failed to provide the required emergency needs assessment and assistance requests for audit review, further indicating non-compliance with legal provisions.
Revenue Collection and Management Issues
The audit report identifies serious flaws in the county’s revenue management.
The county collected Kshs. 152,700,178 as own-source revenue without an approved County Finance Bill for 2022, violating Section 132 of the Public Finance Management Act, 2012.
Additionally, there was an unexplained delay in transferring Kshs. 14,064,615 from revenue collection accounts to the County Revenue Fund, contravening Regulation 81 of the Public Finance Management (County Governments) Regulations, 2015.
Unregulated Procurement Practices
Irregular procurement practices are rampant in Isiolo County. The Department of Health Services engaged suppliers for amounts exceeding the legal thresholds without proper procurement procedures.
Payments of Kshs.3,900,000 for cleansing and sanitary materials and Kshs.3,500,000 for medical records and stationery were made through requests for quotations, which should not exceed Kshs.3,000,000 for goods and services according to the Public Procurement and Asset Disposal Regulations, 2020.
The lack of supporting documents like receipt vouchers and inspection reports raises concerns about the authenticity and necessity of these procurements.
Mismanagement of Assets and Non-Compliance
The county’s asset management is in disarray. There is no updated asset register, and the assets of the defunct County Council of Isiolo have not been incorporated into the current records.
This lack of documentation and proper management violates Regulation 132 of the Public Finance Management (County Governments) Regulations, 2015.
Moreover, many assets remain uninsured, contrary to Section 160 of the Public Procurement and Asset Disposal Act, 2015, putting them at risk of loss or damage.
Failure to Adhere to Fiscal Responsibilities
The county’s wage bill exceeds the legal limit, representing 38.4% of total receipts, while the law stipulates a maximum of 35%.
Additionally, the county continues to employ individuals beyond the mandatory retirement age of 60, violating Public Service Commission Regulations.
This overemployment exacerbates the fiscal strain on the county’s resources.
Lack of Transparency and Accountability
Governor Abdi Guyo’s administration has failed to prepare and submit crucial financial statements, including those for revenue collected and the emergency fund.
This non-compliance with Section 165 of the Public Finance Management Act, 2012, underscores a lack of transparency and accountability in the county’s financial management.
Isiolo County has been called out for managing six commercial bank accounts
The Office of the Controller of Budget (COB) flagged Isiolo County for using six commercial bank accounts and manually processing Sh27.11 million in personnel payments, contravening legal requirements to use the Integrated Personnel and Payroll Database (IPPD) system.
COB Margaret Nyakang’o emphasized the risks of manual payments and urged the county to expedite IPPD integration and unified personnel numbers.
Isiolo’s practices violate Regulation 82(1)(b) of the Public Finance Management (County Governments) Regulations 2015, which mandates maintaining county bank accounts at the Central Bank of Kenya.
The County Public Service Board was also urged to regulate staff engagements in line with Section 74 of the County Governments Act of 2012.
Additionally, Nyakang’o criticized the late submission of financial reports by the county Treasury and highlighted a significant backlog of pending bills totaling Sh432.25 million as of December 2023.
For the first half of FY 2023–24, Isiolo’s budget was Sh5.75 billion, with Sh4.01 billion for recurrent expenditure and Sh1.74 billion for development.
The county received Sh2.03 billion as an equitable share and raised Sh168.23 million from its own source of revenue.
Notable expenditures included Sh105.42 million on domestic travel and Sh28.35 million on foreign travel, prompting calls for prudent financial management.
Kenyan politics scenarios has become a case of replacing garbage with garbage, the more things keep changing, the more they remain the same. Corruption has been heavy in the counties, the control of billions has seen big men with dark pasts leave last luxurious positions to vie for the governorship.
In Northeastern Kenya which is going to be our part of discussion on this article, governors continue to impoverish the residence while themselves turn into overnight billionaires. Today, there’s no single county in the region whose governor is not fighting a corruption case.
The filth has attracted flies ready to have a good meal.
Former EACC boss Halakhe Waqo has launched his Isiolo gubernatorial quest promising to deal with graft and revive the economy.
Mr Waqo accused Governor Mohamed Kuti and his predecessor Godana Doyo of underdevelopment saying the achievements made so far were not commensurate to the billions disbursed to the county since inception of devolution in 2013.
Waqo whose tenure was riddled with controversies including bribery claims made on him and ran a totally toothless anti-graft agency then, has said he will use his experience at the EACC to end corruption that had denied residents development and affected provision of services.
Mr Waqo declared that he will contest for the Governor’s seat on ODM ticket.
If elected, Mr Waqo said he will inject resources into Small and Medium Enterprises and give local contractors work to revive the ailing economy.
He also promised to resolve protracted land disputes to ensure residents develop their properties and use them as collateral to access loans for economic empowerment.
“My work is to catalyze development and uplift the lives of our people in a fair manner regardless of their tribe and religion,” he said.
Former EACC boss Halakhe Waqo hoisted high by his supporters during a meeting at Mulata on February 20, 2022. He accused Governor Mohamed Kuti and predecessor Godana Doyo of underdevelopment and promised to fight graft in the devolved unit if elected Isiolo Governor in August polls. Photo credit: Waweru Wairimu I Nation Media Group.
While it sounds good on political podiums that an ex-EACC boss while champion fighting corruption in his tenure, in books, Waqo’s history leaves a lot to buy such rhetoric.
Kemsa Scandal
For those who don’t know, the former anti corruption boss was adversely mentioned in the Kemsa saga that saw taxpayers lose billions to tenderprenuers at a time when the pandemic was crashing the economy.
Waqo was in March 2021 probed by a parliament committee following revelations by Ms Zubeda Nyamlondo, a director of Aszure Commercial Services a company implicated in a Sh347M scandalous tender to supply facemasks to the Kenya Medical Supplies Authority (Kemsa).
Waqo’s name popped up following a sustained probing by the committee members for the witness to provide details of ownership and how the firm sourced for funds to finance such large contract having only done business worth Sh8 million in the previous years.
Waqo confirmed to the that he was a loan guarantor to tge furniture supplies company that won a Sh347 million tender to supply facemasks to Kemsa.
He told the parliamentary committee that he had been approached by a manager at First Community Bank (FCB) – where he and directors of the firm are customers – whether he could provide security to a loan Aszure Commercial Services had sought to finance the Kemsa deal.
Unconvinced that Waqo was merely a loan signatory, the committee summoned Mr Waqo to establish whether he is the faceless owner of Aszure Commercial Services and only fronted Ms Nyamlondo to hoodwink the public.
The lawmakers also wanted to establish why the company, which had an account at Kenya Commercial Bank, decided to go to First Community Bank(FCB) for a loan.
After taking his time, his answers during the grilling painted a clearer picture of a larger conspiracy that did not only involve proxy managers but included bank officials from FCB and put Waqo right in the middle as the major stakeholder.
Waqo denied direct links to the firm.
And this is where it gets suspicious and puzzling, Waqo told the parliamentary committee that he had been approached by a manager at First Community Bank (FCB) where he and directors of the firm are customers whether he could provide security to a loan Aszure Commercial Services had sought to finance the Kemsa deal.
MPs were puzzled as to the nature of relationship that Waqo holds with the bank that the manager had the confidence to approach him as a guarantor and more so what was the bank’s interest in sourcing for a guarantor for a customer. In a normal setting, the customer approaches the bank for a loan with a guarantor in hand. The complex relationship between the bank, Waqo and the firm left more questions than answer as to the bigger common interest of all the three parties.
MPs question that wasn’t answered was why Aszure didn’t seek a loan from KCB where the firm hold its accounts and instead went for FCB. It is unconvincing that Waqo would fund a project for people whom he doesn’t know only relying on the bank’s managers word which also leaves a lot to speculate about their depth of relationship. One can certainly tell who the faceless owner of Aszure Commercial Services is.
FCB is associated with Senior Counsel Ahmednasir Abdulahi and others claim that Waqo too holds stakes in the bank.
And more scandals
In 2014, EACC put the president in an embarrassing situation when it handed him a list of alleged thieves which he presented to parliament during his state of the nation address.
Most of those mentioned were never prosecuted due to lack of evidence.
At one time an infuriated Uhuru on learning the wild goose chase that the commission had sent him on publicly dressed down Waqo at a State House function.
“We Waqo wewe ulinisimamisha hapo mbele ya bunge nikafuta mawaziri…mpaka wa leo, after two years hujaniambia where their guilt is,” the president lambasted him.
According to Adan Guracha, the then EACC lead detective in the scandal, Waqo used the proceeds to build a six-storey building in Isiolo town.
In a sworn affidavit, Guracha also revealed how Mr Waqo ordered him to discontinue investigations into the fraudulent compensation of the Lamu Coal-fired Power Generation project in 2017.
“When he tabled information linking Dido and Sons limited to the fraudulent pay of over Ksh100 million, Waqo intimidated him and directed him to handle other cases,” the affidavit read.
While Waqo’s path with scandals remain in plain sight, he was appointed Chairperson of the Universities Fund Board on his exit from the anti graft commission which came in the heights of many having lost confidence in the commission.
He now seeks to be Isiolo’s Governor and claims to be a saint, choice is yours, for us it’s just giving you reminders of whom you’re dealing with.
