The Auditor General has revealed that over Sh1.3 billion from Nairobi County meant for the payment of workers’ salaries cannot be returned to the country’s payroll account.
In the audit for the year ended June 2023, Ms Nancy Gathongo noted that the reported staff wages were not reflected in the bank’s county payroll account.
“The staff expense reimbursement amount for the year of Sh11,185,475,652 differs from the total payments traced to the bank payroll statement amount of Sh9,793,541,055, resulting in a mismatch discrepancy of Sh1,391,934,597,” Ms. Gathongo points out.
The Auditor General did not provide details of the Sh1.3 billion, but Nairobi County responded to Daily business It was linked to the payment of salaries of employees inherited from the defunct Nairobi Metropolitan Services (NMS) which were not absorbed into the payroll.
The county attributes the untracked salaries to three months of payments to returning employees from the Natural Resources Management System, which ended in October 2022.
Nairobi has refused to accept 1,700 employees hired by the defunct National Service Corps on its payroll.
“The discrepancy of Shs1,391,394,597 relates to third party salary deductions for NMS staff paid by Nairobi City County for the months of October, November and December 2022.
“Nairobi County has not absorbed the staff recruited by the NHS through the Public Service Commission, but has allowed them to continue serving the rest of the relevant contracts, most of which will expire in early 2024,” Nairobi Finance Minister Charles Kirich said.
When Nairobi City County signed the instrument to transfer some services to the National Service Commission in 2020, the county seconded 6,604 staff to work under the agency run by the now-defunct House of Representatives.
However, Ms Gathongo noted that when the NMS mandate expired at the end of September 2022, the agency hired an additional 1,700 workers, which was in contravention of the contract it had with the province.
“At the end of the transfer instrument period, NMS returned 7,526 employees to the City County. Of the 7,526 employees, 1,700 were not part of the employees seconded to NMS in 2020, meaning they were recruited by NMS contrary to sections 5.6 and 5.7 of Gazette Notice No. 1609 dated 25 February 2020 on the transfer instrument,” the Auditor General notes.
In reactions to Daily business Mr. Kerrich said on Friday that the county executive refused to accommodate workers hired by NMS following a resolution of the county general assembly, during an investigation into the absorption of inspection officers working for the defunct NMS.
“For those whose contracts have expired, the province has advertised jobs according to the provincially approved establishment, and the provincial Public Service Board has now appointed the majority on probationary service terms,” the provincial finance minister said.
The audit also noted that the county reported spending Sh161 million on basic wages for casual staff and Sh92.8 million as personal allowances paid in kind, but failed to provide documents to support the payments.
The county says the Sh161 million payments were made to temporary workers hired to collect revenue data, such as community health promoters, sewer cleaners and central business district sweepers.
The county also claims it has remitted Sh1.7 billion in statutory deductions that the Auditor General noted were deducted from employees in the 2022/23 financial year but were not remitted.
“Analysis of the payroll data submitted for audit showed that the County Executive deducted from the statutory staff entitlements from Paye, NSSF and NHIF a total of Sh1,715,817,035. However, no evidence was submitted for audit to prove that the deducted amounts were remitted to the relevant authorities as required,” Ms Gathungu stated.
Mr. Kirch said that during the year, the province processed and transferred total net salaries, third party benefits and statutory deductions.
“The payments are made through a system called Jumbo Link provided by the Cooperative Bank where the total salaries are submitted electronically through a secure link to the Cooperative Bank as a unified file where the bank then prepares the electronic transfers of funds and the instant transfer system of funds to the concerned beneficiaries,” he said.