Economy
Evans Kidro and Mike Sonko Hide $18 Billion in Tax Returns – Auditor
Tuesday, July 25, 2023
(From left) Former Nairobi governors Evans Kidro and Mike Sonko. image file | Jeff Angott | This is the time | NMG
A Senate oversight panel heard on Monday that City Hall had failed to report Sh18.46 billion in revenue from its own sources in three financial years between 2016 and 2019, opening the lid on how billions of shillings raked in Kenya’s capital ended up in private hands.
County government auditors, who appeared before the County Public Accounts Committee in the Senate, revealed significant discrepancies between the revenue records presented in the financial statements and those extracted from the cash desk.
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According to the Auditor General, the Nairobi County Government should have reported Sh19.74 billion as annual revenue in the financial year ending June 2018. The amount is based on daily revenue summary records from the cash desk.
However, the province reported Sh10.1 billion in its official financial statements for the fiscal year, hiding Sh9.64 billion.
The following year City Hall again reduced its revenue by Sh3.87 billion when only Sh10.1 billion was announced as against Sh13.97 billion collected from the auditor’s records.
In the fiscal year ending June 2017, the provincial government also reported a drop in revenue of Sh4.95 billion.
During the financial year, City Hall declared Sh10.9 billion in revenue from its own source against what records showed was Sh15.85 billion.
These shocking revelations touch on former Governor Evans Kidrow’s final fiscal year and the beginning of his successor Mike Sonko’s term.
The auditor told the committee: “We looked at the system and the numbers extracted from the records from the cash desk that they provided versus what was declared in the financial statements presented significant discrepancies.”
Accordingly, the commission called for a forensic review of the provincial government’s revenue to explain the anomalies.
This comes at a time when the county has been struggling to meet its revenue targets and pay outstanding bills.
The committee is currently considering the audit reports of the provincial government for the three financial years from the fiscal year ending in June 2017 and 2019.
The committee chair, Moses Kajwang, raised concerns that despite several initiatives in automating revenue streams and involving various revenue collectors such as JamboPay, the National Bank and the Kenya Revenue Authority, annual collection has stagnated at an average of Sh10 billion.
Mr. Kaguang, Senator for Houma Bay, has ordered a special forensic audit to be conducted within three months and report to the committee.
“We want to assure the country and the people of Nairobi that you are not collecting revenue and collecting money because there have been discrepancies in what is collected and what is reported,” said Mr. Kagwang.
“We want to make it clear that people were keeping or reporting money honestly.”
Nairobi Senator Edwin Sifuna challenged the incumbent governor, Johnson Sakaja, to plug loopholes for revenue leaks.
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Sakaja said his department has now fully automated its 170 revenue streams to stop human interaction with cash to reduce revenue leakage.
He also indicated that they have put in place a single payment system known as Nairobi Pay.
“We have also set up the Nairobi Revenue Authority to manage the county’s revenue,” said the Governor.
Numerous reports, including from the Revenue Allocation Commission, have indicated that Nairobi could raise NIS 25 billion annually and has potential of up to Sh67.7 billion if all revenue streams are automated and a new valuation list is implemented.
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