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Auditors: Sh143b counties’ property exposed to misuse

Auditor General Edward Ouko

Part of the Sh143 billion property counties inherited from defunct local authorities in 2013 has been stolen.

This is according to a damning report by the defunct Transition Authority (TA), its successor the Intergovernmental Technical Relations Committee and office of the Auditor General.

The assets taken over by counties include 40,815 parcels of land and over 7,000 vehicles, but the defunct entities also left behind debts amounting to Sh62 billion owed to suppliers and banks.

The report found that county governments are still grappling with evaluation and validation of assets that include land and buildings and liabilities inherited from the defunct local authorities four years on.

It is the lack of an inventory of assets and liabilities that has authorities raising red flags about the status of the Sh143billion worth of property.

“It is my view that the most critical action now involves getting experts from diverse fields including surveyors, forensic auditors, engineers, etc. to undertake an in-depth audit of this unaudited inventory,” Auditor General Edward Ouko advised.

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He continued: “The in-depth audit will include reconciliations, forensic audit and comprehensive physical verification, validation and valuation of both the assets and liabilities.”

Former TA chairman Kinuthia Wamwangi said there were outstanding issues that must be resolved to have a comprehensive and audited inventory of all assets and liabilities of the defunct local authorities.

 Nairobi County

The county took over Sh89 billion worth of assets, the largest portfolio among the 47 counties, and Sh40 billion in liabilities from the former city council.

Of the 653 parcels of land captured, auditors could only report on 363 parcels estimated to measure 1,355 hectares (3,348 acres).

The other 290 parcels have not been indicated.

Private developers at Komarock estate have grabbed public utility land include Komarock Primary School’s playground.

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Land along Kayole spine road has been sub-divided and unplanned residential flats built.

Approximately 1 acre of the Gichagi Primary (Kinyanjui Road primary) located along Kinyanjui road has been grabbed.

The defunct local authorities in Nairobi had 989 projects as at March 27, 2013 which had a total cost of Sh5billion. These projects were in different stages by the time of transition and have not been completed.

The Kawangware depot, located in Kawangware shopping centre and fenced with a perimeter wall, has no registration details.

The public has created an access road through Riruta Health Centre, located along Naivasha Road, which has encroached on the facility yet there is ongoing construction of a theater.

A water tank and two units of staff quarters have been developed on the land behind Nakumatt Karen and is currently being claimed by a private developer.

The Karen Sewerage has a sewerage pool and is also occupied by flower and tree nursery vendors.

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Governor Evans Kidero’s administration was also faulted for failing to avail crucial documents such as list of disputed assets, which were owned by the City Council of Nairobi, un-surrendered imprest holders, bank statements to confirm overdrafts, loan repayment schedules, pending bills report and detailed supporting schedules for house rents, sundry debtors and Pumwani maternity hospital.

A total of 49 suppliers presented supporting documents including purchase orders, contracts and invoices to indicate that the defunct City Council of Nairobi had not paid bills amounting to Sh5.7 billion. Eighty five per cent of these relate to Local Authorities Pensions Trust (Laptrust) and National Social Security Fund (NSSF).

Baringo County

Auditors found there are 138 parcels of land based on reports given by former clerks of the defunct councils and responses by locals.

These parcels of land do not have supporting documents like title deeds, lease certificates or allotment letters.

 Mombasa County

Auditors questioned debt swap agreement of two residential estates:

Changamwe estate, comprising 300 one bedroomed houses, which were transferred to Laptrust.

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Makande estate, comprising 144 one bedroom units and 144 two bedroom units, which were transferred to National Housing Corporation (NHC).

 West Pokot County

Verification of 1,248 parcels of land and 26 buildings is incomplete.

There was also zero draft of list of assets and liabilities.

 Bungoma County

Some 2,483 parcels of land were recorded of which 629 had no land reference or title deeds.

The auditors found that, in most cases, it was not possible to determine legal ownership or size of buildings.

Kakamega County

The defunct local authorities never secured ownership documents for 762 parcels of land hence it was impossible to even tell the acreage.

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Assets left behind were Sh432 million and total liabilities Sh1.5billion.

Recommendations made for the county to undertake a comprehensive verification exercise of the assets and validation of liabilities in order to come up with a county asset register.

 Kisumu County

Some 268 parcels of land and 34 buildings were captured in the report, but no specific figures for assets and liabilities were given.

A recommendation is made for valuation of all assets that belonged to the defunct local authorities and an independent audit of all claims against it before they are settled.

It also called for a forensic audit to reconstruct all missing data that is related to assets and liabilities of the defunct local authorities.

 Meru County

Verification established that there are 2,480 parcels of land.

Recommendations were made for the County Government to take over Micii Mikuru Tea estate measuring 637 Acres (258 Ha). 

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