Secrets Unveiled: Kidero & Sonko Concealed Sh18bn Tax Revenues – Auditor
During the three fiscal years between 2016 and 2019, City Hall failed to declare a staggering Sh18.46 billion in own-source revenue, a Senate oversight committee learned on Monday, shedding light on how billions of shillings collected in Kenya’s capital may have ended up in private hands.
Auditors for the county government, testifying before the Senate County Public Accounts Committee, disclosed substantial discrepancies between the revenue records provided in financial statements and those obtained from the cash office.
According to the General Auditor, Nairobi County should have reported Sh19.74 billion in annual revenue for the 2018 fiscal year ending in June. The amount is dependent on the cash office’s daily revenue summary records.
In its official financial statements for the fiscal year, however, the county only declared Sh10.1 billion, concealing Sh9.64 billion.
The following year, City Hall again understated their revenues by Sh3.87 billion, declaring only Sh10.1 billion compared to the auditor’s estimate of Sh13.97 billion.
During the fiscal year ending June 2017, the county government underreported its revenues by Sh4.95 billion.
During the fiscal year, City Hall declared Sh10.9 billion in revenue from its sources, despite records showing Sh15.85 billion.
The startling revelations pertain to the final fiscal year of former Governor Evans Kidero and the start of his successor Mike Sonko’s term.
“We investigated the system, and the figures extracted from the cash office’s records versus what was declared in the financial statements revealed significant discrepancies,” the auditor told the committee.
To explain the anomalies, the committee demanded a forensic audit of the county government’s revenue.
This occurs during a period in which the county has struggled to meet its revenue goals and pay its outstanding debts.
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Currently, the committee is reviewing audit reports for the county government for the three fiscal years between June 30, 2017, and June 30, 2019.
Moses Kajwang, chairman of the committee, expressed concern that despite several initiatives to automate revenue streams and engage diverse revenue collectors such as JamboPay, National Bank, and the Kenya Revenue Authority, the annual collection has remained stagnant at an average of Sh10 billion.
Senator Kajwang of Homa Bay ordered the special forensic audit to be completed within three months and a report to be presented to the committee.
Mr. Kajwang’ stated, “We want to reassure the country and the residents of Nairobi that you are not stealing revenue, as there have been discrepancies between what is collected and what is reported.”
“We want to demonstrate that people have pocketed the money or have reported the same accurately.”
Senator Edwin Sifuna of Nairobi challenged the current governor, Johnson Sakaja, to close revenue leakage vulnerabilities.
Mr. Sakaja stated that his administration has entirely automated its 170 revenue streams to eliminate human interaction with cash and prevent revenue loss.
He also mentioned that they have implemented a unified payment system called NairobiPay.
“We have also established the Nairobi Revenue Authority to manage the county’s revenue,” the governor stated.
Several reports, including one from the Commission on Revenue Allocation, indicate that Nairobi has the potential to collect Sh67.7 billion annually if all revenue sources are automated and a new valuation roll is implemented.
Secrets Unveiled: Kidero & Sonko Concealed Sh18bn Tax Revenues – Auditor
