Governor put to task over Sh742m expenditure

Kericho Governor Erick Mutai has been taken to task by Senate over unauthorised expenditure of Sh742 million during the 2024/2025 financial year.

Mutai, who appeared before the Senate County Public Accounts Committee, had a difficult time explaining why the total expenses exceeded the approved Sh4.7 billion budget to Sh5.4 billion.

The committee pointed out that the over-expenditure was contrary to the law.

“The Public Finance Management (County Governments) Act requires an accounting officer to ensure that public funds entrusted to their care are properly safeguarded and are applied for purpose for only which they were intended and appropriated by the county assembly,” said the committee chairman Moses Kajwang.                                                                                     

The Homa Bay Senator raised concerns over financial statements reflecting that employees’ salaries were Sh3.38 billion, which is 49 per cent of the Executive’s total revenue of Sh6.9 billion contrary to the Act that the limits expenditure on wages and benefits to 35 per cent.  

The Governor said over expenditure of Sh212.9 million under employee costs was due to a freeze on recruitment, while the apparent over-expenditure of Sh955 million under use of goods and services resulted from the expensing of capital-related items that did not meet the asset recognition criteria.

“The over-expenditure on employee compensation was due to inherited wage obligations, including staff from defunct local authorities, promotions, salary increments, and implementation of collective bargaining agreements which have exerted pressure on the wage bill,” said Mutai.

Mutai told Senators that consequently, these costs were appropriately charged to expenditure rather than capitalised, leading to a reclassification within the expenditure categories without increasing the overall level of spending beyond available resources.

According to the Auditor General report, water and sewerage infrastructural works under rural schemes budgeted for Sh210 million had not been implemented.

The committee pointed out that there was no evidence provided to show that the responsible AIE holder informed the accounting officer on the non-performance of the budgetary provisions by February 15, 2025 which was contrary to law.

It also raised concerns over the contract for the Sh541 million industrial park in Kapsorok, which was signed on October 17, 2023, but at the time of audit in June, 2025, the contractor had been paid Sh72 million 913.5 per cent) against estimated physical progress of 40 per cent.    

“The contractor continued with works despite delayed payments to maintain project timelines, resulting in higher physical progress compared to payments made, the works valued at Sh512,” said Enoch Wambua of Kitui.

The Governor said the variance between certified physical progress and payments made was attributable to delayed release of counterpart funds from the National Government, cash flow constraints and pending interim payment certificates awaiting processing and the Exchequer release.

The team further said that according to the audit report, expenditure amounting to Sh230million was incurred on construction of roads. However, the roads constructed were not included in the approved procurement plan.

Johnes Mwaruma (Taita Taveta) noted that this was contrary to Section 45(3) of the Public Procurement and Asset Disposal Act, 2015.

Okongo Omogeni (Nyamira) said the county budgetary performance implementation and indicators for the year under review reflects budgetary provision in respect of strategic Intervention totalling Sh234 million. However, the budget estimate and performance presented and approved by the county assembly did not contain lists of strategic intervention projects financed.

Isiolo Senator Fatuma Dullo pointed out that the procurement plan revealed that enterprises owned by youth, women, and persons living with disabilities were allocated Sh742 million of the planned annual procurement amounting to Sh2.9 billion with this representing 25 per cent of the annual procurement budget.