Kisumu Gov.Peter Anyang' Nyong'o Appears Before Senate Public Accounts Committee for Grilling

[0:00] worth of what we used to call pending bills, $5.9 billion. [0:07] Your revenue for the year was $9 billion. [0:10] Of course, you know the PFM Act and regulations talk about debt to revenue ratio. [0:17] What is the recommended debt to revenue ratio, PBO? [0:22] What's the recommended debt to revenue ratio as per the PFM regulations? [0:29] Auditor General, I know. Patrick, remember we said that that should be queried for all the counties? [0:38] Yes, Chairman. We circulated the request, but for this one we had not gotten the report. [0:43] Okay, but what's the recommendation? What's the percentage? [0:47] The debt to revenue ratio for county governments, it should not exceed? [0:55] Is it 20% or 30%? [0:58] 20%. [0:59] It should not exceed 20%. [1:01] So, you have $5.9 billion. Basically, $5.9 billion out of $9 billion is 60-something percent. [1:09] Yeah? [1:11] So, I think let's contextualize it. Let it not be an accounting conversation. [1:17] Let it be a conversation around the people who are demanding $5.9 billion from Kisumo. [1:24] And what the plan is, knowing that Professor Anyang Nyongo, at this time next year, [1:32] you'd be preparing to hand over. And the question is, no, Professor General, stop provoking me. [1:38] He wants me to say that you're handing over to him. But that's for the people of Kisumo to confirm. [1:47] But whoever it is he's handing over to, it could be a fellow professor. [1:52] Are you planning to hand over $5.9 billion debt to the next administration? [2:01] What is the plan? Because these responses, whatever is on paper, is just accounting speak. [2:08] Let's speak to the real matter. You close that year with $5.9 billion as debt. [2:15] Whether it's legal fees, whether it's one-year-old or three-year-old or 10-year-old. [2:22] But after 10 years of being in office, would you be handing over $5.9 billion as unpaid debt to the next administration? [2:32] As a professor, he prepares to respond to your question. [2:40] I would request that you find me because the question that you're asking, to me, speaks to [2:49] management response to the query. I thought today we are dealing with implementation status. [2:58] Where are we after the query was raised and after we made recommendations? [3:06] Perhaps it may be, it's not even $5.9 billion. It could be $2 billion. It could even be $20 billion. [3:12] You know, where are we? Implementation status, Chair. Chair, through you. [3:15] Yeah, just to buttress that, our, by the way, our standard recommendation on pending bills is usually [3:23] more detailed than what you have put there as recommendations by OEG. It is so long. It's almost [3:28] two pages. That's why I didn't ask the clerk to read it. But we might want to read it. We might want [3:34] to read it so that it now prompts the entity to address each of those specific recommendations. [3:40] Professor Ojenda. [3:41] Thank you, Chair. Chair, I, and thank you very much. The big elephant in the room, as Senator Wambua [3:51] properly observes, is what the CEC Finance and the county have done to bring down the $5.944 [4:02] billion, $565 billion, and also to tell us why, whether the non-reflection of the $1.870363 billion that [4:14] they say are legal abilities, have been settled. What is the extent of the settlement? Because for me, [4:20] Chair, and this is my concern. You do not train incompetent people who fail to include into [4:29] financials relevant figures that should be included. You sack them or transfer them. You can't tell me [4:37] that every year, when people fail to do things, that you train them. So they do them better the [4:43] following year. Transfer them, sack them. George Okongu, Sisi, what have you done, Governor? What have [4:49] we done to ensure that we clean up this department that is letting the county down? [4:58] Okay, so very direct questions. Clark, how long is our recommendation on pending bills? [5:06] So that, because that recommendation was communicated to the county, and it had specific [5:14] issues, which should tie to what Senator Wambua and Senator Ogiend are asking. Because we gave [5:23] recommendations on, you know, what should be paid immediately, what requires a payment plan, etc., etc. [5:33] Clark, do you have it? Maybe, Governor, you may respond broadly. Because there's a broader one, [5:54] which to you as a CEO must trouble you if you are, if you are owing 5.9 billion. And then now there's [6:04] a technical aspect of how that debt is moving. The Chairman, I'll ask the Finance Minister's response, [6:11] please. Thank you, Mr. Chairman. In terms of action on management of pending bills, Mr. Chairman, [6:19] I will first agree with what Senator Mbua said, that the first thing we have to deal with is to check [6:24] as to whether the figure remains the same. It is not by way of reconciliation. We had, in fact, [6:31] at the time of the audit in that particular year, we had made payments because of the delayed disbursement [6:37] of June. We had made payments that were not accommodated at the time of that reporting. And so [6:42] the reconciliation has been done. We have put it in our status report that it is going to be available [6:49] for audit this year. But I can still give highlights of what it became after reconciliation. [6:55] And say that it moved down to 4.074. And we can even give the classifications in terms of [7:04] development, recurrent, and even pending bills related to human resources. But beyond reconciliation, [7:12] to get the correct numbers... Chair, just, Chair, please. Okay, just wait a minute. [7:16] Chair, the Governor, can we have a schedule of those who have been paid? Tell us who has been paid [7:22] since then, the 1.2 billion. Because there are people in Kisumu County who are about to commit [7:26] suicide because they have not been paid. Chair, you may want to tell the Professor, who is Senator, [7:35] to call it down, Professor. But you know these are about to know the professors. [7:40] No, wait, wait, wait, wait, wait. I am on the floor. [7:42] Order. So, Chair. Okay, Senator Wampua. [7:44] Chair, you know, you know, CEC Finance, please, I request that you don't throw figures at us. [7:51] Yes. You came here to have a conversation with us about the implementation status of our recommendations. [8:00] So you're not coming here to tell us that you are undertaking reconciliation. That is so yesterday. [8:09] We want it on record. As the Professor is asking, where is the schedule of the people that you are [8:16] paid? Where is the schedule of the people that have not been paid? Where is the schedule of the [8:22] people that you think you should not even pay? I mean, something I expected better from Kisumu. [8:29] Please. Okay. Um, we, we stopped you in your tracks when you're explaining something. Clarks, [8:35] are you, do you have the recommendations? Ready? Okay, then I'll call, I'll call upon you shortly. [8:41] Senator Chirage, you, okay, your mic is off. You can proceed. I just wanted, because I just [8:47] walked in when he was talking about 1.2 billion. In fact, the governor, the implementing status is from [8:57] the answer that you have given. We are not even sure how much is being owed in Kisumu in [9:02] terms of the, uh, what should happen? How much has been paid? Because I can see the response you [9:16] have given us on implementation. Because you have not even, uh, including asset management. So my only [9:25] concern is how much as up to date, the year under review, sorry, is being owed. The OIG has said it's [9:34] 5.9 billion plus. Uh, your CC has said it is 1.2 billion plus proof. So we take that one in a pinch of [9:44] salt. Then who has, and this issue of schedules and reconciliation statements. So it means how did you pay [9:53] without having this schedule and reconciliation status of 1.2 billion? So we, we must be told, [10:00] and in terms of aging analysis, at what period? Is it over three years, within two years, under one year? [10:08] That's, that reconciliation is not there. So what are you paying? [10:12] But point of information, Chair, the, the, the Senator for Nandy, don't even hang on that one. [10:18] Or two, it's nowhere, you know, it's, it's just a figure that has been drawn at us. It's, it's, it's, [10:23] yeah, I think let's be a, uh, factual. So maybe it would benefit the professor and his team to listen [10:33] to the detailed recommendation we made on that matter, because that, that is what we expect you [10:39] to respond to. Clerk? Yes, Chairman. The committee made the following recommendations. One, three [10:50] payables due for more than 365 days, because we considered indicative of poor financial management, [10:57] and the county executive must provide an actionable plan to the COB within 90 days of the adoption of [11:03] the report. Two, all county governments must prioritize the payment of verified pending bills, [11:09] owed to staff, deductions, including KRA, NSSF, NITA, and pension funds within 90 days of the payables [11:17] becoming due, as this constitute a first charge. Three, the ESCC to investigate pending bills, [11:25] particularly those owed to staff and statutory bodies, to establish whether funds due were [11:31] retrieved from the county revenue fund, and if so, how they were utilized, with a view to recommending [11:38] prosecution of liable persons. Four, the COB is directed to consider a county's efforts to clear [11:47] inherited pending bills as a key factor when approving exchequer releases, and should not approve [11:53] releases or subsequent quarters where an approved payment plan is not being adhered to. Five, that all [12:00] county governments pay verified pending bills amounting to less than one billion by end of [12:07] this financial year, and those above one billion by the end of the financial year 26-27. The committee [12:14] further recommended that pass on to provisions of regulation 41, 2, and 3 of the public finance [12:21] management county government regulations 2015, county governments prepare and submit to the control of [12:26] budget. A payment plan prioritizing payment of pending bills as a first charge on the county revenue fund, [12:33] failure to which the subsequent quarter releases will not be done. Two, the control of budget takes [12:40] into consideration the efforts made by a county government to clear inherited pending bills when [12:46] approving exchequer releases. Three, county governments shall only pay pending bills contained in their [12:52] respective procurement plans. Pass on to regulation 52 and three of the public finance management [12:58] county government regulations. Four, supplementary budgets for county governments are prepared in the [13:05] third quarter to curb instances of arbitrary reallocations out of the approved budget estimates. [13:12] Five, county government in consultation with the control of budget to provide a budget for completion of [13:19] all existing projects and that transition of new projects to cease until completion of the existing [13:25] projects. The last one, county governments shall conduct public participation while formulating [13:32] supplementary budgets, failure to which the COB shall not approve supplementary budgets and the COB [13:39] and the senate will monitor compliance and apply sanctions if payment plans are not or not. [13:45] That was all. Okay, they sound fairly generic because we didn't have an opportunity for [13:52] Kisumu to appear before us before we made those recommendations. We would have gone further and [13:57] made recommendations around aging because the auditor has indicated that the age of this debt is not [14:05] clear. But the thing that recurs in that recommendation is a payment plan. Payment plan to be, you know, [14:15] shared with the control of budget and it ties to what we are asking. Do you have a payment plan? Have you [14:21] submitted it to the control of budget? And as per that payment plan, to what extent has this debt reduced [14:28] or increased? Yeah. On behalf of the governor, thank you, Mr. Chairman. Let me just take on the questions [14:38] and the specific way you put them. First of all, the disclosure of the pending bills in terms of aging [14:45] under one year, one to two years, two to three years, and over three years has been made and it is public. It is [14:53] actually on the county government of Kisumu website. The numbers are there. It is public information. [15:00] And I can, we can probably submit, we can provide it now, but it is, it's been, we are required by the [15:08] Kenya Devolution Support Program 2 as participating counties in KDSP 2 to disclose our pending bills and [15:15] put it public on the website. And we've done exactly that. No, my request. Why is that information not [15:20] available? The, the place where you're supposed to put it is here in the financial center. [15:25] Not the website. If you have that information, why you keep it? It is not here. And the, and the [15:32] auditor general queried it. You know, these senators have some, uh, experience now in looking at that [15:39] particular note. And, uh, we, we, we, we know there's some detail that we usually find there, which is [15:45] missing. So I think it is not enough to tell us it's on the website. If it's not on the financial [15:50] statement, we cannot take what is on the website. And I think that goes back to the very first question [15:56] we asked about the competence of the preparers of the financial statement. If you have it, maybe someone, [16:03] someone can just produce it so that we, we see whether it explains implementation of a payment plan. [16:13] But you've started with a very dangerous statement. I thought you were going to tell us about your [16:17] payment plan. Chair, again, how many Kisumu people can access the website? Because most of these counties, [16:25] if you look at the website, it's not even there. Yeah. So, so, so CZ, don't take us that route. It's [16:31] going to lead you into problems. Let's go to, do you have a payment plan? Yes. Can we, can, can, can, [16:39] can, if it is on the website and the payment plan, can he add John and print it, if it is actually [16:45] there? Or can he task one of his people there to print it and, and present it now because the website [16:52] is live. The, the, the challenge will be to take, to take evidence that has not, that the auditor [16:59] general has not looked at. Correct. And we try to make sense out of it in this session. The chairman, [17:04] on the payment plan, I think I, I could say so because the control of budget is here and the [17:10] payment plan, just like read the recommendations, the payment plan was submitted to the control of [17:15] budget and it is what we've been using to pay. So, so where is it? So chair, it was a recommendation [17:21] by this committee. It's a, it's a query by the office of the general. Why is that part of your bundle? [17:28] Why? And how much have you paid so far? It's as simple as that. Actually, that is a question [17:36] that you need to respond to. How much? You have a payment plan. You have given it to the control of [17:40] budget. What, what, what is now, what, what is the net position right now? And who are these people [17:48] including, because even in not number 17 trade and other payables, there is a note or not number [17:55] as the trade payables of figure four billion zero 74 two or three excludes payables currently undergoing [18:02] verification. So who are they? Because you, this is your financial statements is you generate. [18:08] So this is your document. So who are they? Okay. So governor, before you get to that question, [18:14] yes, just tell us your payment plan as implemented as it resulted into a reduction of this figure from [18:22] 5.9 billion to a different figure or it remains the same. Mr. Chairman, the pending bills performance [18:38] for the year in terms of payments, we in the plan, we intended to pay up to 1.9 billion shillings. [18:48] That was the total amount of the plan divided under development and recurrent of 1.2 billion [18:55] staff claims of 33 million and salary and other statutory areas of 701 million. The actual payments made [19:07] came to no, sorry, sorry, Mr. Chairman. I think I mixed them up a bit. The action plan had a total [19:15] value of 2.5 billion. I'm sorry about that. The actual payments are the figure that I've read. [19:22] He's reading from somewhere. Can he refer us to the, he's reading from somewhere? [19:28] Because we had said, Mr. Chairman, that this information will be given to our [19:31] orders. Let me guide you. Let's, let's allow him to give us an account of that current status. [19:39] And then from there, we demand evidence to it. Because remember, so that we don't sound too technical and [19:47] to work, you know, accountant like this 5.9 billion is owed to a woman or a man somewhere. [19:54] So we must speak to it. You know, we must speak to it from that perspective before we go to the [19:59] technicalities. Because you see chair, the reason I'm asking that is because I can see him reading a [20:05] document quoting figures to the scent. And I'm saying, let's walk with him. Let him tell us where he's [20:13] reading from. We have the document that he has given us here. Where is he reading from? Is that [20:18] an internal document or is it something that has been subjected to scrutiny by auditors, both either [20:24] internal or external? Mr. Chairman, we said in our status report that this reconciliations would be [20:30] availed to the auditor at the audit of this financial year. So I'm just reading an internal document. [20:35] But I think this information, because the payments were made by the control of budget, this information is [20:41] obviously also with the control of budget. So members, can we allow him to give us the picture? [20:46] He says he had a plan of 2.5 billion. He has not told us how much of that plan has been paid. [20:51] Chair, with all due respect, the auditors are supposed to look at that and verify. [20:59] We are not on the ground. So we cannot listen to document that we don't have. And who will verify it? [21:05] Yes, Chair, if you rule that we need to hear from that gentleman and he needs to make reference to [21:17] that document, then in all fairness, maybe he should circulate that document to the auditors [21:23] first. We get the opinion so that we take information that does not create any doubt from [21:31] the side of the auditors. Otherwise, it would be very unfair to allow him to refer to a document [21:36] that does not have, you know, the comfort of the auditors. Chair. So if you want them to refer, [21:43] then let them pass the document to the auditors. Then we can be on the same page. [21:48] Okay. So members, we have two steps in this. There is this public inquiry that we are holding, [21:58] which perhaps helps the people in the counties to understand the intentions of their government. [22:04] And that's why we are asking this question. There is a next step of making our recommendations. [22:10] And we cannot make recommendations without relying on documents that are properly, [22:16] you know, signed off and properly reviewed. So senior council, I agree with you that we cannot do, [22:23] we cannot make recommendations on this matter without the governor circulating a proper document [22:30] before us. But for the sake of that public interest, we want to establish whether there is some movement [22:38] in or there is some progression in settlement of pending bills. You have heard the way Professor [22:44] Jenda, who's an area senator, has spoken with passion. We just want to find out whether things are getting [22:51] worse or things are getting better. Honorable members. If you rule that chair and we don't [22:56] want to counter mind your decision, then let him share that document, a soft copy. Then we can ask [23:02] questions on it. Okay. I want to give directions that if that document is available. Yes, since I'm the [23:09] senator and this is oversight, my concern, the reason why I raise this is because we, on the ground, [23:17] we hear that there are particular suppliers who are paid and not others. And that's why we need [23:21] to see that list. Are there particular ones and not others? I think, chair, that tradition [23:30] for neatness is that the county government has said there was a payment plan submitted to COB, [23:36] control of budget. We need now to speak to 5.9 billion, telling us how much they have. You have asked [23:43] a right question, chair, that how much has been paid and who are these people. And based on aging [23:49] analysis, because we know first in, first out, FIFO. So we need to know, because apart from the [23:55] semantics around it, there is a businessman or a woman from Kisumu who has been owed for some time and [24:01] they really want to know whether they have been paid or not. That is now, we'll avoid the technicality [24:06] part. So can the CEC, that that is being given to COB, the payment plan, how much has been paid? [24:13] Chair, you remember on several locations, many entities who have appeared before us [24:17] have always submitted how much has been paid to who and how much is spending and who are these [24:24] companies. And including even the timeline. I remember the last entity that appeared here, [24:29] even the timeline, others indicate 2013, 2014, 2018, 2019. So can we get that? If we get that, [24:36] I think we'll make an headway. Members, I think we are saying the same thing. We are saying the [24:40] same thing. Let's, we, we, Prof, you have got a big team around you. Your CEC says there's a payment [24:50] plan. Is that payment plan available and can it be circulated? Your CEC says an amount has been paid [25:00] as per the payment plan. Is it possible to get the schedule of payments as per that payment plan? [25:06] I believe that's what we're asking for, honorable members. So is it something that is ready and [25:11] available for circulation? Thank you, Mr. Chairman, on behalf of the governor. Yes, [25:19] the figures in terms of what has been paid is available. We can circulate. What perhaps we don't [25:26] have right now is the list of individuals who have been paid, which if given some time in the course of [25:33] the day we can give, because we didn't carry the list of who was paid, how much, the suppliers and [25:38] the contractors. I cannot lie that we have it here. You see China, that's a problem that we find [25:43] ourselves in. What the CEC is saying is that you can circulate a document. I've not seen it. You've not [25:49] seen it. That tells you we are paid 1.2 billion Kenya shillings. But it doesn't have the detail of [25:59] agenda was paid. Not some agenda. Agenda was paid 10 million. [26:06] Omondi was paid. Wambua was paid this much, this much. What is the value of that document, [26:12] Chair? Secondly, remember, he has said it on record that that document has not been submitted to the [26:21] auditor. So who will have verified that document for us so that we can rely on that document to [26:29] interrogate the implementation status? Chair, you find ourselves in a very awkward situation, [26:35] but I have known you to be a very wise man. You must find a way of getting us out of this. [26:41] I'd like us to make progress. So we have this one? The CEC doesn't want to say how much he has paid [26:50] because as per the implementation status, we are interested where genuine [26:55] pending bills of trade papers have been made and unsettled. So can you say how much and maybe [27:03] specific entities? But you are looking from what the CEC is not admitting. I don't think we'll make [27:09] any headway the way because there's no evidence. So you can direct that this matter, the governor can [27:16] come back to provide further clarity because now we are just shooting in the dark. [27:22] The governor has taken oath and he said he's going to say the truth and nothing but the truth. So his oral [27:31] submissions, I think, are admissible. But there are three things the committee is asking for, [27:41] which you need to tell us whether we can get it now or not. The payment plan, the schedule of payments, [27:50] and also that aging analysis, which your officer says is on the website. [27:54] Those three things are important for us to make proper recommendations on this. But to avoid a [28:01] situation where a conversation around the livelihoods of the people of Kisumu is terminated on [28:08] technicalities, I want us to come back and perhaps consider the oral submissions. The evidence can come [28:16] and we can consider it as we write our report. But speaking on behalf of the people owed 5.9 billion, [28:24] CEC were explaining something about your payment plan that you had planned to pay 2.5 billion. [28:34] You did not tell us how much of that was paid. How much of that was paid? [28:43] Thank you, Mr. Chairman. I was reading the pending bill's performance as handed over to me internally. [28:52] We had an action plan which had a value of 2.5 billion, and the actual paid amounted to 1.9 billion, [29:02] achieving a pending bill's performance ratio of 76%. [29:07] Now, of the 1.9 billion, now that we are saying we can take your oral submission for now, just for the [29:18] sake of the public interest, how do you break it down in terms of the age of the debt that was settled? [29:26] Was it current? Was it historical? But Chair, I think we are mixing up issues here. We are not getting [29:37] what is the total amount of pending bills for Kisumu County. And CEC is saying having paid 1.9 billion, [29:47] it's 70% of the total outstanding. Yeah? 76. So, how do we arrive at that? Because we are not able to [30:00] verify that position. See, see, stop throwing numbers, because 76 is a percentage of the plan, [30:06] isn't it? Not a percentage of the total. You're right, Mr. Chairman. Yeah, so don't use numbers, [30:12] don't use percentages to look good. Let it go on record, so that in the interest of those people [30:21] of Kisumu, those figures that we are discussing here are unavailable to the CC. We don't have those [30:29] figures. Yes, and we will give directions that they must be provided, and they must be subjected [30:36] to scrutiny, and they must be made public. Yeah. Senator, Professor. As the CC presents his report, [30:43] can he highlight how much of those pending bills go back to the tenure of the first governor? The [30:51] oldest during Ranguma's time, how much of those bills go back to Ranguma's time when he served as [30:57] governor of that amount? Yeah, I think it's the same question I asked around the age, the age of the [31:05] settled debt. Do you have that? Are you able to respond on that? Mr. Chairman, the classification [31:16] that I have in terms of the actual payments of 1.9 billion is only on development recurrent staff and [31:23] salary, but I can get the data on the age. It's not aged. It's not aged. Now, members, [31:28] the reason why this is an important conversation is that the analysis by the parliamentary budget office [31:33] indicates that, and PBO, I'm seeing a slight variation in the numbers here, 2024-2025, [31:43] I'm seeing 5.7 billion. Where did you get that number from? From the auditorial report. Not 5.944. [31:56] Chair, that was the pending bill. Not the pending, the wage bill. Oh, yes, you're right. Yeah, [32:11] you're right. I withdraw that. The parliamentary budget office tells us that in 2024-2025, [32:20] you close at 5.9 billion. The prior year, 2023-2024, you close at 2.8 billion. So there was a growth of [32:32] 3 billion in pending bills in one financial year. And I know my colleagues will ask for evidence to [32:42] support your claims. But we need to understand what led to this huge spike of 108% in pending bills in [32:55] one financial year. And we have had stories here about delayed exchequer, ETC, ETC. We need to get an [33:04] explanation. Your pending bills have been 2021-2022, it was 2.4 billion. 2022-2023, it was 2.0 billion. [33:14] 2023-2024, it was 2.8 billion. 2024-2025, it was 5.9 billion. That raises serious concern. [33:24] What could be the cost of the 3 billion growth in pending bills in one year? Prof? Sir Chairman, [33:35] the growth, it was driven largely by rulings that were delivered in the course of the year by courts [33:41] against the county government, and also a consent that the county ended with the national housing [33:48] corporation with respect to an estate. I mean, the matter had also been in court that the county [33:55] actually owed the national housing corporation. I think the county attorney will confirm up to 1.1 [34:01] billion, and the court ruled. The county entered consent to pay, and so that figure was admitted [34:08] in our role inventory of pending bills. There were a number of other significant decisions of the court [34:15] which amounted to pending bills. I remember one from the top of my head of about 480 million, [34:21] and so on. But maybe the county attorney can help explain, because a good number of that was driven [34:28] by decisions of courts. Okay, so it's real growth. It's not just an issue of timing of exchequer? [34:35] Prof? Even after the reconciliations to take care of the delayed exchequer and the payments that were made, [34:45] we are saying that there was actually real growth, and that growth was driven by key decisions of the court. [34:54] Prof? Okay. We need to get an answer to that, because in the analysis, a parliamentary budget [35:00] office indicates that the sharp growth in pending bills in 2024-2025 warrants further audits to establish [35:08] whether it resulted from delayed exchequer releases or weak commitment controls. You have added another [35:16] dimension of rulings. You wanted the county attorney to add something. Thank you very much. I think at [35:27] this point in time, I can only confirm the 1 billion stake. So it is true and correct that between the NHC, [35:38] or the national, or between the local authority Providence Fund, and county government of Kiswamo, [35:43] there had been a case, and that figure, that figure is coming to 1.5, 4, 1.5, 4, 0, 8, 14, 8, 83. [36:03] Is it because, Chair, I'm only confirming, I'm only confirming, county attorney order, through the Chair, [36:13] in the legal dues it says the opening balance was 2.6 billion, 8, so where are you getting the figures? [36:19] You know, we are dealing with what you have. It's those figures through the Chair. [36:24] Chair, is that a judgment for the county to pay for the houses? The 1 point, is it 1.1 or 1.5? [36:34] Chairman, I've referred to a legal dispute that was pending in a file, that is being settled at 1.5 [36:45] That's an award. It's already determined, or it's a contingent liability? That is by consent. [36:51] It's by consent? That is by consent. So that's one matter, 1.5? Yes. So Chair, you see that's where the [36:59] problem is. You know, you know him, he talked about 1.1 million, billion. He is talking about 1.5 [37:08] billion. We are looking at a blank. We don't know what it is that we are dealing with. Chair, [37:14] I want to persuade you. As I heard Senator Tom say, I'm not sure we are ready to engage on these matters, [37:20] honestly. Because how do you engage with, you know, top of mind? You know, this is what I think, [37:26] this is what I think. How? Chair, and I have a new one, because looking at the, [37:32] they were legal dues here, and the opening balance in that year under review was 2.6 billion. So what [37:38] is the fate of contingent liabilities? Because if there was an award that was given, it should have [37:43] been taken care by contingent liabilities, and my law lecturer is here in agreement with me, [37:49] Professor Ojeda. That's why I'm confused, because what they say doesn't make sense. And if my letter [37:54] is confused, how was am I? It doesn't make sense at all. Okay, we were asking for the reasons for the [38:03] growth in pending bills of 3 billion. So far, 1.5 billion has been referred to. What about the other 1.5 [38:12] billion? Because legal, legal dues, you have talked of 1.5. So that explains 50% of that growth. [38:24] What about the other 50%? That is assuming that that was the right explanation. So what about the [38:32] other 1.5 billion? Mr. Chairman, one of the reasons is already one that you have read there. When we have [38:44] late disbursements of exchequer at the end of the financial year from the national treasury, [38:50] then what is paid in the new year becomes, is considered a pending bill in the year that was closing. [38:58] But the other thing which is also true is the underperformance of on-source revenue leading [39:03] to literally funds and availability also is responsible for part of that rise in pending bills. [39:15] When you're doing your transition to accrual accounting, there was a steering committee [39:21] and there was supposed to be technical groups under the steering committee and I believe one of them [39:32] was to look at your trade payables and how to transition them. Who led that working group? [39:41] Because in this year you're supposed to have a steering committee and then you're supposed to appoint [39:46] different working groups. It was led by the chief officer in the department. [39:53] The chief officer who is in the room. Yes. I'm also looking at your audit and finance committee [40:07] as disclosed in the financial statement, chaired by Mr. Elijah Owino Ngonga and the eight members [40:17] are there with very impressive qualifications. Is the chairman of the audit committee present, [40:24] part of the delegation? No, he's not here. [40:30] I think it's good practice to have them here because this ties very neatly with what they do. [40:38] Because the reason why I raise that is we are extremely concerned that we don't seem to be [40:43] keeping a proper inventory of what we owe. And I want to, I know my colleagues are frustrated about [40:50] the lack of details, but I don't want this to terminate technically. Prof, I think we need to get your [40:59] views on this because if at that time, one year or two years to the end of your tenure, pending bills [41:11] are rising, consents are being entered into that would cost the county about 1.5 billion. Your pending [41:20] bills is rising faster than your own source revenue because rising by 3 billion, your own source revenue [41:27] is much less. We know you to be a person who perhaps sees the forest, does not, well you can see the [41:36] trees but you prefer to see the forest. What is a plan to ensure that on the 10th year of your leadership [41:45] of Kisumu, the county is not settled with debt and that the debt to revenue ratio can go back to what [41:53] is recommended in the PFM? Mr. Chairman, I think this is feasible. Once you get the report of the [42:02] discussions today, which I hope you'll get very soon, we'll sit down and get your concerns and we shall then [42:12] go into the practical duty, practical work, going through what finance has presented here and what [42:20] have been, what questions have been raised which finance has not covered. I think that's very clear. [42:26] Secondly, I know for certain that we have a problem of revenue and debt. Some of the debt, [42:34] as you know, are historical. We received them from past regimes. Some of the debts arise as a result of [42:43] policies of the national government around ourselves which may increase salaries at a certain point [42:50] and we are obliged to pay those salaries without realising that, while realising that actually the [42:56] revenue that you have cannot meet the demands that you have. These are practical things on the ground [43:02] that we see. So what, and we would like to find solutions, definitely, and I think this committee [43:08] can help us find solutions with the national government in this issue. So what I think we do, [43:13] we go back, having taken the questions and the issues that have been raised here, and we come back to the [43:19] committee with solutions. And if, Mr. Chairman, we cannot get solutions, we'll ask you to help us get them. [43:28] So I think that, to me, it has been a learning process this morning of issues that you should have [43:33] known and covered and we didn't. Secondly, trying to put in place a system of getting information in [43:42] time. One of the problems that you have in government is sometimes departments make decisions and spend [43:52] money, but we don't get that information in time. You understand what I mean? I mean, even in government, [44:00] you can be a minister and the departments are spending all kinds of things and there's a time [44:04] that you'd want it, but you know, this is not ready until this date. So I think that my feeling [44:12] and my recommendation is that we go back, look at the issues that have been raised, and then come back [44:20] with responses to those concerns based on the information that we are going to get from talking [44:27] to these people. Do you have an idea on what your staff payables are? What you owe to staff? So we've [44:50] talked of legal. What about staff payables? Because it goes back to the initial, the starting point of [44:58] a conversation that the persons who prepared these financial statements did a lousy job. You can tell [45:05] on the face of the financial statement what you owe to staff. And members, I think you, I'm a bit lenient [45:13] today because, uh, uh, uh, because, uh, because, uh, because prof used to sit here. Yeah. He used to [45:24] chair this committee. He used to be with us in the house. Um, and when we went to Kisumu, we wished him [45:32] well, and we continue to wish him well. And, and we must be proactive in terms of our advice. Of course, [45:40] our recommendations will be as stiff as they are, but we must help him see some things, uh, that maybe [45:48] from where he sits, he might not be able to see. How much do you owe to staff, um, out of this 5.9 [45:56] billion? Can I ask the financial minister to respond? Yes. Thank you, Mr. Chairman. Um, the [46:06] monies owed to staff are, we categorize them into two. Some of them are areas of salaries and, um, and [46:14] surgery deductions that may not have been remitted, that have not been remitted. Historically, that comes [46:20] to 1.3 billion. I need to clarify that this, particularly the ones that are owed to the... Yeah, [46:30] on a point of order, I think, uh, it is safer to, to continue with what professor governor has proposed. [46:37] Yes. Because we are now going into a dangerous quagmire that will not come out for. So is it safer... [46:44] We need to discuss it so that when they go back, they can prepare a comprehensive report. [46:48] But the CCM is going to the same place where we have been. And again, Chair, the problem is, [46:56] you see, he is, uh, he is sinking and, you know, we have no visibility of the vessel that he is [47:09] sinking in. How do we help him? How are we supposed to help him? Because, Chair, he has just dropped a bomb. [47:19] So this is... 1.3 billion. Starved payables. That is... I mean, no, if we have that document here, then we... [47:32] Chair, I want to persuade you. And, and I understand... The, the, the beauty is that I... Go to note 20. Yes. Go to note 20, [47:40] or the financial statements. Because now we want to look at that 1.3, and how it relates to what is [47:46] in note 20, which has employee benefits obligations. Yes. Chair, as you, as we go there, Chair, can I also [47:52] request you to get a response from ESC on the status of, uh, this guy who, who prepared this financial [48:01] statements? Christian, did you get, uh, any response? Uh, I didn't get the full name of the CPA. Oh, and you [48:10] still don't have the number? Yeah. Okay. Okay. Fine. So, so seriously, you're saying that [48:18] Arreas is 1.3 billion. Quite, quite a big number. But if you go to note 20, in your financial statement, [48:26] it has some very alarming numbers there, 5.8 billion. Page 46 of the audit certificate, [48:39] note 20, notes the financial statements, note number 20. [49:28] So, on, um, note 20, not 20, employee benefits obligations. Um, employees? So, so we, [49:42] we want to tie it with the submission of the 1.3 billion as the outstanding obligation. You, are [49:50] we on it? Yeah, we're seeing it, yeah, sure. And, and auditor general, I would have expected you to [49:56] query this particular note, because it does not tie with anything else in the financial statements. [50:04] So, under note 20, it indicates that, uh, total employee benefit obligation is 5.8 billion. Is that [50:18] the case? Uh, is, is that, uh, is that the position? Because I can see lab fund 417 million. NSSF [50:39] 5 billion. Uh, I, I wonder how that, uh, how that would be. NSSF 5 billion. CPF 104. It goes on and on. [50:53] Insurance cover medical, 132 million. Please help us and interpret for us that note. [51:01] What about these burial expenses of 1 million, 375,000? Yeah. They come from 605. Insurance cover [51:12] medical are two. This 132 million. Maybe we can allow them to explain to us the note. [51:19] Total 5.8 billion. Uh, let, let, let the, yeah, let the CC explain. I want to say that the NSSF [51:28] figure is obviously an error. It's not, we don't owe NSSF 5 billion shillings. We owe them around 500 [51:35] million shillings. And that is how the total bill should have come down to one point rather than 5 [51:41] billion. So I agree with you. It is true. The NSSF figure in the financial statements was an error. [51:47] Yeah. But chair through within the, I thought this is your document is a financial statement. [51:54] So have you rectified it in any form? Auditor general, how come you didn't raise this matter? [51:59] Because you are, you have, you have long paragraphs on, uh, procurement for Calvert's worth 2 million, [52:05] 3 million. But this has not come out on that. Sorry. We have reported on that. Oh, you have reported [52:12] on it? Yes. On paragraph? 15. Oh, it's a subset. It's a subset on lawfulness. Yes. Okay. Okay. Then, [52:21] but I'm asking chair to the governor and see, see, this is your document. When did you realize there is [52:28] an error or is it now? This one not number 20 employee benefit obligations that you don't owe NSSF [52:36] 5 billion, but you owe them 500 million. When did it come to your attention? [52:40] Mr. Jibban, the OEG noted it and we are going to make those adjustments in the next financial statements. [52:49] No. Chair, I don't think that's where to proceed. Chair, because the summation, the summation [52:56] is correct. When you add up the figures, they add up to 5.8. So the summation is okay. Now you cannot [53:06] revise a figure during inquiry. Just say, you know, it's not 5 billion, it's 500 million. You reduce by [53:15] 4.5 billion, just like that. I mean, where does that happen? I think what we may need to do, [53:27] going back to the first point of order you raise Senator Mbua, we probably might need to generate [53:37] certain questions around this, which the entity should respond to because they didn't come out [53:44] clearly in the audit. But now that you're looking at the financial statements, which is proper, [53:51] which is what we learned from Professor Nyongo, that you don't just look at the audit report, [53:57] you must also look at the financial statement itself. The financial statement is generating a lot of [54:02] additional and supplementary questions, which perhaps we can agree that we weep each other here, [54:11] or we can agree that we provide the entity with an opportunity to respond to them in a much more [54:19] specific manner. And I think we are not here just to weep the professor and his team. We are here to find [54:26] ways of ensuring that the people of Kisumu get paid, your employees are getting paid, but you also have [54:34] visibility on what it is that you owe, your employees and your service providers. So because the more we [54:42] ask, the more slippery the slope becomes. So now, and the starting point was the quality of the financial [54:55] statement and the competence of the signatories to the financial statements. That's why we are where [55:03] we are. So I don't know whether the same parties are the ones signing the next set of financial [55:09] statements. Are they the ones who signed the ones that you're looking at? Auditor? [55:17] Chair, CRF. CRF is signed by the chief officer. Are you asking for the current here? [55:27] Yes, for the current. [55:28] Yes, I believe they are still the same. [55:31] They are still the same. So prof, you see what you must do, you must make sure that the signatories [55:36] to your financial statements are people who are in good standing with their professional bodies. [55:43] Because mistake is theirs, but then the embarrassment is yours. So you must make sure that they don't make [55:54] those mistakes so that the embarrassment also does not come to you. Senator Dulo, you wanted to make [56:01] some contribution. I think we have not done very well as far as this query is concerned. And governor [56:11] has requested to be given more time so that they can go and look at this properly and give proper response. [56:18] So I think instead of interrogating further without getting a solution to the problem, we should allow [56:25] them to go back and sit with the auditors and come up with a proper response so that we can be done with [56:32] this particular query. Because there is huge sums of money involved in this particular matter, which raises [56:38] a lot of concern. So I think let us give them time. Even the one on court consent is too much for government, [56:48] 1.5 billion. Yeah. So something needs to be done. Let's allow them to go back and work on it and then [56:55] give us a response depending on how long you will allow them to do that. Thank you. [56:59] Yeah. And also consent, I think you members, you remember the Kilifi settlement, which raised more [57:06] queries when it was tabled before us. Senator Dr. Lelegwe, I don't think you had gone on record. [57:14] Yeah. Yeah. Please just go on record. Thank you, Chair. My name is Lelegwe Tumbezi Senator for Samburu, [57:19] member of the committee. So I think the reason why we are having this problem is that we are moving [57:28] from the report of the Auditor General to the recommendations of the Senate to implementation [57:35] status. So there's a gap in there. I think there's some missing information because you are responding [57:42] to, actually what you did here was to respond to the OAG's recommendation, not to the Senate [57:49] recommendation. If you are to respond to the Senate recommendation, you would have addressed some of [57:54] these specific things that are coming up. I think we can give the delegation certain timelines to provide [58:03] information in the right format because the Auditor General queried those two notes that we have referred [58:09] to. Note 17 was not aged. It was not broken down in the proper manner. Note 20 has got inaccuracies in that [58:19] matter of NSSF. So we are not even able to tell what the exact obligation is that is owed to staff in [58:29] Kisumu County. So we can clarify our areas where we need to have information for purposes of writing this [58:37] report. But Auditor General, in the 2025-2026 audit, you must also make sure that you pay special [58:44] attention to the issues that we have raised. [58:48] Chair, on LabFund, I think these are payables to staff who have retired. And the amount involved is [58:56] 417 million, which is a lot of money that should have actually helped those who have retired. So maybe [59:03] we need to have an explanation why, up to now, these guys have not been paid, despite deduction from [59:10] their salaries. Thank you. [59:12] Dr. Kisumu County- Oh, you want to respond? Proceed. [59:19] Thank you, Mr. Chairman. Just two things. One is what you just said, that we definitely could have a [59:25] problem because we are responding to the recommendations of the Auditor General and not [59:31] necessarily the recommendations of the Senate committee because we didn't see those recommendations [59:35] on the Senate committee. We are responding to the recommendations given to us by the red line. [59:39] Then secondly, is on the issue of LabFund and the figure and whether people are suffering. [59:45] Mr. Chairman, if you look at our status implementation report, we are saying that we are still [59:51] negotiating some waivers with LabFund and we are not the only county doing that because that figure [59:55] that you see there is not the principal amount owed to the employees. It has interest and penalties. [1:00:01] A huge chunk of it is actually interest and penalties. The specific municipalities that were owed by the [1:00:08] time of the transition authority were just two. The actual figure is much less than that, but [1:00:15] there is a negotiation around, do we have to pay these interest and penalties? So that's what is causing [1:00:21] this problem. It's very difficult to reach a conclusion having agreed that the numbers that are here [1:00:30] are also not tying up. Moving from 5 billion to 500 million is not something that you would take lightly. [1:00:38] So we will provide a detailed questionnaire for your response, but it won't be very far from our [1:00:48] recommendations. If you are responding to our recommendations, you would have been able to [1:00:52] address these issues. As you have said, you are responding to the OAG's recommendations. [1:00:58] And again, under note 20, you've got retirement benefit assets and liability applicable to pensions. [1:01:09] And you've got that narration down there. And you know, when I was reading it, I was asking myself [1:01:17] what that was supposed to communicate, where you say the entity operates a defined benefit scheme for all [1:01:26] full-time employees from 1 July 2024. And then what do you say next? Who is a scheme administrator? [1:01:38] Who is a custodian of the scheme? What is the percentage of salary? Are you seeing what I'm seeing? [1:01:53] Under retirement benefit assets or liability, where you are supposed to explain the kind of scheme you have [1:02:02] for your full-time employees? You're supposed to disclose your administrators. You're supposed to [1:02:08] disclose your custodians. You're supposed to disclose the percentage salary of an employee. You know, [1:02:16] the percentage of an employee's salary that is supposed to be deducted and remitted to the scheme. [1:02:28] You are supposed to disclose who did the actuarial valuations, because these are defined benefit, [1:02:36] not a defined contribution. I'm just pointing your attention to that, that that disclosure was not [1:02:47] proper. And Auditor General, is that material? Is it a material disclosure on the manner in which they [1:02:57] treat the retirement benefit liability? Yes, it is. Okay. Yes. So it is something that they need to [1:03:05] provide precise information on? Yes. In the case, because it's one of the requirements in that template, [1:03:13] they should have given the information as required. Thank you. Okay. Prof, are you seeing my point? [1:03:22] Yes, I see your point, Mr. Chairman, and I don't see why that information cannot be made available. [1:03:29] Because the retirees are known, and when they retire, those records are kept by the finance department. [1:03:38] So I think given time, we can provide that. Okay. Members, I think I've listened to Senator Dulo, [1:03:47] and the need for us to provide timelines and specific questions that the entity should respond to, [1:03:55] which we can consider as a committee or we can ask the auditor to deal with in the 2025-2026 audit cycle. [1:04:06] Since a number of the other issues in this report have been dealt with by the county assembly, [1:04:11] and in view of that difficulty in getting proper verifiable records to close some of those non-conformances, [1:04:27] perhaps we might need to give the entity some time, if you agree, on specific outstanding issues in the [1:04:34] executive report, particularly on pending bills or trade payables, particularly on obligations to staff, [1:04:42] the retirement benefits arrangements in Kisumu County. Because I think those are serious, [1:04:48] serious risks that, Prof, you wouldn't want to leave office, and then employees say that the retirement [1:04:54] benefits are not accounted for. We have seen cases where even gratuity cannot be paid to outgoing staff, [1:05:02] because it was being deducted, but not remitted. And I think for a governor who's coming to close of [1:05:11] term, those two should be very, very critical things that you look at on a daily basis. [1:05:18] How much you owe suppliers, your contingent liabilities, or litigation in progress, and how [1:05:28] it can affect the entity, and what you owe your staff. You should not close this financial year [1:05:40] without having clarity on that. Prof. Jenda. [1:05:43] Prof. Jenda. I just wanted to add, I note the issues you have set out for governor. I think my [1:05:52] bigger concern, and I just wanted to note this, governors you exit, that it's a really glaring concern [1:06:02] that if you look at your schedule of on-source revenue, for instance, parking fees has gone down from [1:06:10] $98,551,263,000 to $113,548,000. What is wrong? And number two, property fees, and I know that [1:06:22] a lot of properties you have set out, you have leased out to private entities to collect rent, [1:06:30] has gone down from $20,447,000,000 to $20,000,000,000 to $6,000,000,000. What is happening? [1:06:38] Prof. Jenda. We, much as you've grown revenue to $2,7,000,000,000,000, some of those concerns are [1:06:48] so glaring, given that market, for instance, you have new markets, why would you be having, [1:06:54] it is, market fees has gone down to $56,000,000,000 from the $60,000,000,000 the previous year. I think [1:06:59] they're just concerns, there are highlights that should be of concern to you as governor, as you exit, [1:07:06] so that at least we have, clearly some of these financial streams should be going up, given the fact [1:07:12] that there are property developments in Kisumu that are live, that are going up, [1:07:16] so there's no reason why they are collecting less, when last year they are collecting more. [1:07:21] There's no reason why there are no cars in Kisumu, when I know there are more, and parking fees [1:07:27] won $13,000,000, and it was $98,000,000,000. Where is the $97,000,000,000? Where is this money? [1:07:33] Prof. Jenda has gone to the Receiver of Revenue report. It was part of our agenda for today. [1:07:42] I think it was apprehensive that the meeting is ending, without us having looked at the ROR. [1:07:50] But we'll make one or two comments on ROR before we close, over and above the specific questions that [1:07:58] he has fielded. Senator Wambua? [1:08:01] Senator Wambua, Chair, very briefly, on the issue of the executive report, I have just three issues, [1:08:11] because you said we try and shed some light. One, Governor, first things first, you cannot have [1:08:24] people preparing your financial statements, who are inactive in their profession, and they're not [1:08:33] in good standing in their own profession. Because, I mean, what do you expect? If you cannot take care [1:08:38] of your own professional obligations, then how will you take care of counter-issues? Whatever [1:08:44] administrative action you decide to take on those ones, I will actually recommend, Chair, that perhaps [1:08:52] these two should not prepare those documents that are brought before us, because they have put us in a [1:08:59] lot of mess. Secondly, on the issue of trade payables, let's have a proper document that is even aged, so that we [1:09:14] can have a proper engagement on who is it that is owed, how much money by the county, [1:09:23] what is the payment plan. I have the CC giving us a percentage of achievement of a payment plan. I would [1:09:37] rather it gives us an achievement, a percentage of the total order amount, how much of the total order amount [1:09:45] has been paid, and who has been paid for what services delivered. Lastly, Chair, is on the issue of staff [1:09:54] obligations. Perhaps this is where we should draw the line. You see, Professor Governor, when I look [1:10:02] at the accumulative monies owed to employees from Love Fund and Love Trust, it's almost 500 million [1:10:10] Kenya shillings, and there's no explanation for it. It's just a figure that comes to us. There's no [1:10:16] explanation to what's happening and why it is happening. Whatever it is that we do, Governor, and I am [1:10:22] praying God that a few months from today I may be seated where you are seated from Ketui. Whatever [1:10:29] it is that we do, let's just be humane. Let's just do... I never understand why any entity, whether county [1:10:38] or national, would deduct money from people, and that money at retirement does not help those people. [1:10:48] It's actually robbery for those people. That's what it is, and it's not right. I thank you. [1:10:54] Chair, maybe since we are doing in a few, maybe on receiver of revenue, one quick one. [1:11:03] I have seen, Governor, the revenue potential of Kisumu. I can see there was an increment in the previous [1:11:13] year of 1.5 billion. It went to 2.7 billion in 24-25, up from 23-24, with significant drop that [1:11:26] Professor Tom Ojenda has alluded to, and it is... You should be able to tell us why that sudden drop [1:11:33] in some of those items on this receiver of revenue reports, number one. Number two, [1:11:40] what is the status of the... You know, we did pass FIF Facility Improvement Act. You should tell us [1:11:51] whether your systems in the hospitals have been automated. And then finally, the revenue potential [1:11:59] of one source revenue, and I know your people know under CRA should be 28.2 billion, considering this [1:12:07] a city county, but you are only collecting 2.7 billion. What is this massive shortfall of close to [1:12:19] 26 billion that we are missing the target? And I know there are many revenue streams that the CRA, [1:12:26] Commission of Revenue Allocation, the revenue streams had been maximized. Because, for example, [1:12:32] Governor, in conclusion, if, for example, you are seeing parking fees dropping from 98 million. In fact, [1:12:41] it dropped from 22-23, it was 99.4 million. In 2023-24, it dropped by 1 million to 98.5 million. [1:12:51] But in 2024-2025, it came down to 113,548 shillings. That is a drop of almost 97 million. [1:13:04] So, in correlation with the biggest figure of 28.2 billion, what we have to say, because most of [1:13:11] the revenue streams in this year under review have dropped, yet the CRA potential gives you [1:13:16] at 28.8 billion. I know they might have overestimated, but the practicability of collecting [1:13:22] more than 2.7 billion is very high. If all these revenue streams are being properly looked at, and [1:13:30] maybe touch something with FIF. And finally, Chair, because we are on receiver of revenue just, [1:13:38] there was also the issue of a valuation role. What is the status of the valuation role [1:13:44] that will assist you to maximize some of these revenue streams, so that you can be able to collect [1:13:49] more and be able to do some of this payment, including managing whether the wage bill or the [1:13:56] trade papers or the pending bills as is known? Chair, and on development expenditure, [1:14:04] maybe you can touch something, because I can see you are only doing 17 percent [1:14:11] of development expenditure. What is the basis of this? Because comparing to wage bill, Chair, [1:14:18] it stood at 63 percent, the wage bill, which means there is a significant use on recurrent expenditure. [1:14:26] I know under United Nations through the Chair, human capital has been defined as also part of [1:14:32] development. But coming from that, what is the basis of this 63 percent on the wage bill, [1:14:40] vis-a-vis 17 percent on development expenditure? So that I know your argument could be you inherited a [1:14:47] lot of employees from municipalities that were there, and therefore you could not fire anybody, [1:14:54] you had to retain them for some time. But how are you going to handle this? And I hope Professor [1:15:00] Jenda is noting some of these questions, because he intends to be the governor of Kisumu City County. [1:15:07] These are some of the questions that may roll over to the next financial year. Chair, I yield back. [1:15:12] Okay. You've asked questions that cut across the ROR and the executive report, [1:15:18] and since Professor Jenda brought us into the ROR conversation, maybe we start with the ROR ones very [1:15:24] quickly. Even though, PBO, you want to comment about parking fees as per your analysis? Chair, [1:15:34] the parking fees are not dropped. There was a small mistake. Yes, yes. Just clarify that, because it's [1:15:44] very alarming. Yes, but I want to bring to the attention of the committee on the selected revenue streams. No, [1:15:49] no, no, no, no. Let's deal with that. Because, so what's the right amount for parking fees? It's [1:15:58] supposed to be 111,548,551. There was a small error. Okay. And not 130,000? Yes. Yes. Yes. [1:16:07] Okay. So that clarifies that. So now you can comment on the others? But Chair, if you look at the [1:16:15] budgeted amount and in the next page. Sorry, Professor Jenda is raising, bringing my attention [1:16:23] to property fees. Is that comparison accurate from 20 million? Yes. The other one is correct, [1:16:29] yeah, apart from the parking fees. There's no, there's no mistake there? Yes, yes, yes. And the [1:16:33] rest of the lines are okay? They are okay. Okay. The only problem we have is the parking fees. The parking [1:16:39] fees. Yes. But if you go to the next page on the performance and the budgeted and actual collection, [1:16:46] for example, the parking fees, the county budgeted, the county government has budgeted 600 million, [1:16:53] but they have collected only 113. So that's a variance and drop and performance of 499 million. [1:16:59] And million. And million. Yes. You see all these are the key revenue streams that really [1:17:04] and performed. Even in market fees, they are projected 355 million, but they collected 56 million [1:17:12] 411.98 million, missing a target of 298 million, 588.012 from the market fees. Yes. And even looking [1:17:24] at the property fees, they had budgeted to collect 63 million, 844 million, they collected 6.1 million, [1:17:31] missing by 57.6 million. Yes. Even advertising fee. I thought this is governor, because you had budgeted [1:17:39] 400 million, you ended collecting 146 million, missing 253. I thought these are low-hanging fruits, [1:17:46] governor, especially advertising. Okay. So I think because we need to make a bit of [1:17:52] faster progress. Do you have a receiver of revenue? Because all these questions are coming from the [1:17:59] report of the receiver of revenue. We do. Do we have the receiver of revenue in a substantive position [1:18:06] or in an acting position? Is the acting chief executive of the Kisumu County Revenue Board [1:18:14] and the public service board is recruiting the substantive one. They actually advertised and I [1:18:17] think they're interviewing. Because the Auditor General has queried lack of a substantive receiver [1:18:24] of revenue. The gentleman was signed here as the receiver of revenue. I think it reads like Nandi David. [1:18:32] Nandi David is present. He's here. Professor. There was this, this other, there was the [1:18:41] Mako Bewa led. Was that the one, the receiver of revenue? The one that was chaired by Dr. Mako Bewa? [1:18:50] It is the technical staff there. No, no, no, no. There was one that was chaired by Dr. Mako Bewa. What [1:18:55] happened to that one? He was sharing an entity and then he resigned. And there are queries around that. [1:19:02] What was that? That is the Kisumu County Revenue Board. So what happened to that board? What happened [1:19:10] to that one, to his resignation? Sir Chairman, you need to guide me where they can take it. [1:19:14] No, no, no. It's important. Okay. Do you answer that question? Order members. There was a CEO of revenue. [1:19:22] Just a minute. We will be repeating ourselves. I asked whether there is a receiver of revenue. [1:19:27] That receiver of revenue is designated by the county executive committee member for finance. [1:19:33] So the receiver of revenue can designate collectors of revenue. So that's why I asked the question, [1:19:40] do you have a receiver of revenue? The answer is yes. And now Professor has talked about a county [1:19:49] revenue board, something like that. Is that a collector or a receiver of revenue? The county [1:19:57] revenue board is an entity that oversees. So it's basically an oversight over the receiver in a way, [1:20:05] because we have a revenue board, just like many other counties. And they supervise the secretariat [1:20:11] that actually collects the revenue headed by the receiver. So the board is an authority over the [1:20:19] receiver. So the person designated as a receiver, is that the CEO of the board? Of the board. [1:20:23] Is the executive. Is the CEO of the board. That's a receiver. But the board designed, [1:20:28] what was the issue around revenue? Mr Chairman, I find this very difficult. [1:20:33] No, no, it's not difficult. It's not difficult. It's not difficult. [1:20:36] I don't know why. Mr Chairman, let me come in. [1:20:39] Okay. Professor, Professor Nyong'o, let's allow Professor Nyong'o to respond. [1:20:43] Please. Mr Chairman, somebody who resigns from his work, resigns for a reason. That person should [1:20:52] say why he resigned, not me. And he did, Mr Chairman. He wrote a letter, because he resigned officially, [1:21:00] and gave his reasons. He said he was pursuing other interests. [1:21:02] Were there queries around the revenue? Mr Chairman, if there were queries around the revenue [1:21:09] in this report, or in any other report, including the county assembly add-off committee report on [1:21:15] revenue, those are known. I'm not sure those are the reasons Makabe resigned, beyond what he said in [1:21:20] the letter. Now, Waziri, the queries around revenue are here. So I don't think it is fair to say there [1:21:31] were no queries around revenue. They are here. You should have just referred us to the auditor [1:21:36] generals and report. Mr Chairman, what I said was that there are queries around revenue on record, [1:21:41] both in this report and also on another report by the county assembly on revenue. Those are the [1:21:46] queries we know. What we are not able to do is to link them to Makabe's resignation. Fine. Senator [1:21:51] Wambua. Just for the information of Waziri, Waziri, I heard you saying that you are finding it [1:21:57] difficult to respond to certain questions. You do not come here for easy questions. The questions [1:22:06] here are supposed to be tough, and the questions being asked here are not personal. There's nothing [1:22:10] personal here. There's a public servant who exited office in circumstances that this area senator [1:22:17] thinks are linked to financial leakages and audit queries. Respond to those questions. Don't take it [1:22:25] personal. They should not be easy. Actually, it should be very difficult. Okay. I think that's just a point [1:22:31] of advice, Senator Adulo. No, I just wanted to know who is your receiver of revenue? The chief executive [1:22:39] of the revenue board, currently Mr. Philip Adundo, at that time David Nandi. Both of them are inside here. [1:22:45] So Nandi David is no longer the receiver of revenue? The current receiver is Philip Adundo, who is also here. [1:22:54] There is also a problem with your ROR statement, and auditor generally should have flagged this. Look at the [1:23:02] signatory to the ROR. Is there a member of ISPAC? Is an associate member allowed to sign off financial [1:23:15] statements? I'm believing that whatever is written there is an associate membership. What does an associate [1:23:25] member mean? Doctary from the Treasury? Is an associate member of ISPAC allowed to sign off financial statements? [1:23:34] Normally, the associate member is one who has not, the communion does not have the qualifications of a [1:23:44] man, an accountant. He has not completed the CPAC, meaning the certified public accounts of Kenya. So [1:23:54] he cannot be a member of the ISPAC. So it's just allowed to be an associate. [1:24:04] Christian? Yes, I have also checked the database of ISPAC and Maurice Omondi is not in the database. [1:24:14] Why are we having this? Yeah. What is this? [1:24:18] So the problems you are having originate from unqualified persons preparing financial statements. [1:24:29] And I think, Governor, you have taken note, and I hope you are going to take necessary action. [1:24:38] There is an audit going on for 2025-2026. Auditor, please look at the competence of those signing off [1:24:49] financial statements. Because if the right people do it, then we'll have fewer audit issues. [1:24:59] Perhaps, perhaps in the remaining three minutes, maybe just ask Professor Nyong'o to respond to two [1:25:09] of the issues that were raised. Maybe a general comment on revenue performance. And then finally, [1:25:17] on the fiscal responsibility, where 63% of your revenue goes to salaries. 63% is extremely high. [1:25:26] Maybe just comment on those two issues, then, before we close this session. [1:25:31] Mr. Chairman, let me first begin by thanking members of this committee for the recommendations [1:25:43] they have made out of this statement. Sorry, I have a flu. I think we'll pick them up, definitely. [1:25:49] It has been a good discussion. It is good to get people to review what you are doing and see [1:25:58] where things go wrong, so that you go back and do things right. I think that's very important. [1:26:04] Now, 63% of revenue going to what, Mr. Chairman? Can you say again? 63% of wages? [1:26:12] Yeah, it goes to wages. 63%. Obviously, the PFM, which you wrote, requires 35%. You are at 63%. [1:26:26] Yeah. No, you see, counties which had municipalities have a problem. We do have a problem. Because these [1:26:34] people were given terms permanent and pensionable. You can't dismiss them. And quite often, [1:26:42] they're not good performers. So if you want something performed properly by qualified people, [1:26:46] you hire. In the end, you find that you have more people in the payroll than you need. And yet, [1:26:51] you cannot fire those people that you found there, because they are permanent and pensionable there. [1:26:55] And you can't deny them of their terms of self-service. So I think we go through a period [1:27:01] where definitely, in counties like ours, Mombasa, Nairobi, and so on, where definitely, [1:27:09] there will be a higher percentage of revenue going to employees than is necessary. Over time, [1:27:19] you can weed out employees as they retire or transfer themselves to other jobs. But you can't [1:27:28] fire them. Because firing them can take you tremendous court cases that you will pay very highly, [1:27:35] as the lawyers here know. So you retain them until they retire. While you retain them, [1:27:40] you must bear the burden of a high percentage wages of money going to revenues. That is just a reality. [1:27:46] Mr. Chairman, can I... [1:27:49] I thought I would hear something about how to fix the problem. [1:27:54] Thank you. [1:27:55] Thank you, Mr. Chairman. I think it's excellent. The governor has explained part of the sources of [1:28:03] the problem. But in fixing the problem in Kisumu, one action that has already been undertaken by the [1:28:09] national government is the takeover of Jaramogio Gingodinga Teaching and Referral Hospital to become [1:28:17] a national government parastatal. That is going to be a relief, because a huge chunk of the wage bill in [1:28:23] Kisumu is actually in the health sector. And a huge chunk of it was actually at Jotirich. So the [1:28:29] numbers are going to shift for that reason. But Mr. Chairman, there's also something we need to raise [1:28:34] here for the attention of this committee in how those figures are computed. 35, 60 and so on. Because [1:28:42] if you talk about 63 percent in the findings of the Auditor-General, that is 63 percent of actual spending in [1:28:50] the year. And then the question is whether the fiscal threshold is on the allocation, which is a budget [1:28:57] figure. And we have had this discussion with the Auditor-General, because they make their finding [1:29:02] on the actual spending. The control of budget interprets the allocation on the proposed budget. [1:29:08] So I think the calculation needs to be qualified. And finally, Mr. Chairman. [1:29:14] So you see, revenue is defined in the PFM Act. Yes. So it's percentage of revenue, [1:29:20] not percentage of budget. So that should not be contentious. Thank you, Mr. Chairman, for your [1:29:26] guidance. Finally, on the question of potential, that's another thing that we really need to point [1:29:33] out. Because the Honorable Senator said correctly that the Commission for Revenue Allocation places our [1:29:38] potential at more than 20 billion. Mr. Chairman, and we need help from this committee, because we have [1:29:45] contested this figure with the Commission for Revenue Allocation to show us, because if you look at that [1:29:50] number, it is an outlier in the entire 47 counties. And we have gone with the CRA even into the workings of [1:29:58] those figures. And it relates to certain calculations that were made by the CRA in terms of the registration [1:30:04] of businesses in Kisumu. Which numbers we are questioning, because how is it possible that the CRA [1:30:10] number is so different from the National Treasury number, which is 7 billion. So we have gone into a [1:30:16] lot of discussions with CRA. Because they say, by the way, that out of the 20 something billion they [1:30:21] expect the consumer to collect, about 20 billion should come from SBPs and outdoor advertising. And [1:30:28] it is based on a database that they used for business registration in 2013. So this is a problem that [1:30:34] I think needs to be correct. But Waziri, what is the Integrated Revenue Management System? Because [1:30:41] that then the auditor says that invoices from your Integrated Revenue Management System shows variances [1:30:48] between unpaid and paid invoices, and that your system generated invoices of 15 billion. Is that a [1:30:56] national government system or that's your county system? The Integrated Revenue Management System, IRMIS? [1:31:04] Mr. Chairman, those have been explained and we have an entire report where there was multiple [1:31:11] multiple generations. But it's your system? It's our system. So then it needs to be cleaned up. [1:31:16] Yes. And we have cleaned it up. If the auditor finds you have invoiced 15 billion, [1:31:20] then he has no reason to doubt your potential to collect the 20 billion. So you also have some [1:31:28] cleaning up to do. Yes. Internally. Especially if it is your system. I think auditor general, you must [1:31:34] continue probing this matter. Because what is invoiced should correlate with what is paid. [1:31:42] And with accrual, if it was invoiced and not paid, doesn't it sit there as a receivable? [1:31:51] So now you have receivables of 15 billion coming from your system. And prof will be handing this [1:32:00] over to another governor and they'll think that he was joking. [1:32:03] I think you're right. We have had a problem. We introduced a system. You know, these technologies [1:32:14] that are now used for collecting revenue. And the sellers took very high of the system. [1:32:22] And this was what I call a reputable company. So we started using this system. And after about [1:32:30] two months or so? More than that. Six months. We realized that really this system was not solving [1:32:36] our problems. I can't go into the details. One of the reasons why we fired the revenue [1:32:42] board was this. Because the revenue board was supposed to make sure that this system works. [1:32:46] But unfortunately, it wasn't working to our interest. So our experiment failed. [1:32:55] Well, it's humbling to agree that something failed. You know, politicians don't like accepting that. [1:33:03] We shall communicate the specific issues that you still need to address for this committee. [1:33:10] And advise the auditor general on matters that they will deal with, you know, as substantive issues [1:33:17] in 2025-2026. But prof, please make sure that never again are you questioned about the professional [1:33:25] competence of the signatories to your financial statements. That sounds inversely proportional to [1:33:32] your reputation. [1:33:33] The chairman, I promise, I promise that we shall scrutinize these people that goes into opposition. [1:33:43] The problem is that we relied so heavily on the public service board that we didn't want to [1:33:48] question their choices. But I don't think they too were wrong. I think people who pretend to be [1:33:55] something else cover their, cover their what, their route very carefully. But in the end, you find that [1:34:02] you are dealing with the wrong person. So we'll have to be very careful and do checks on people before [1:34:08] we hire them. [1:34:10] So to my colleagues who wish to move from the Senate to become governors, you can now see the landmines [1:34:16] that you are going to encounter. Any closing remarks? [1:34:20] I was once a senator and a chairman of this committee. So I can please join us in the county government to [1:34:27] implement what you've been saying here. [1:34:29] I think that's why you're getting a bit of grace from us. Otherwise, [1:34:34] the temperatures would have been slightly higher than they were today. Any matter in closing? [1:34:43] I don't know, prof, whether you have made your closing remarks? [1:34:45] The minister wanted to make some closing remarks. [1:34:52] Not clarification, just clarification. [1:34:53] What is it? Clarification? [1:34:54] Yeah, because there was an issue and we just needed to correct the records. David Nandy, [1:34:58] who signed the Receiver of Revenue Financial Statement, the Receiver of Revenue Report, [1:35:04] is actually a member of ISPAC number 31821 and is here. So we just have one staff to deal with. It's not [1:35:11] both of them. David? [1:35:13] No, no, no, no, no, no. If it's a Receiver of Revenue, there has to be somebody else. It is a [1:35:18] report of the Receiver of Revenue. So there has to be somebody else with the professional [1:35:22] responsibility co-signing the financial statement. So his membership cannot validate that financial [1:35:30] statement. And please, I meet so many unemployed CPAs in Nairobi, in Isiolo. It does not mean that [1:35:38] you must only employ people from Kisumu. There are enough CPAs in this country to do a proper job. So [1:35:44] please, the County Public Service Board. I think someone introduced themselves as the chair of [1:35:51] that. It is a bad, a bad reflection, a bad reflection on the city of Kisumu to have associate [1:36:01] members of ISPAC signing off a financial statement of 2 billion Kenya shillings. And [1:36:07] um, since CEC, you talked of Jeramogio Wingat teaching referral hospital, moving to national [1:36:14] government, how does it affect your 1.9 billion of hospital fees? Because fine, then the staff will [1:36:22] move, but the revenue will also move. How much of it, how much of it was coming from Jeramogio Wingat? [1:36:28] Because this is our record. You also need to remind them that last week we dealt with that matter [1:36:34] and the staff have not been migrated to national government payroll. You're still paying them? [1:36:47] They have migrated. In fact, there was a whole ceremony about that. But there was a delay. Yes. [1:36:52] They have migrated. And when they were migrated, they were very happy. They celebrated. They were led [1:36:56] by the CEO. So they migrated. And you're right, Mr. Chairman, that it will have an effect [1:37:00] on our, on our revenue, but only on the reported figures. But in the actual operations, that effect [1:37:07] is almost zero, because in any case, that money was under FIF, ring fenced for Jeramogio. So it was [1:37:13] not flowing to near the areas of spending. Of the 1.9 billion, how much was coming from Jeramogio? [1:37:20] About a billion shillings. About a billion shillings. Yeah, it was coming from Jeramogio. So nominally, [1:37:25] the revenue will fall, but actually in terms of money available for spending in other units of government, [1:37:30] there will be no effect because that money was not available to other units in the first instance. [1:37:35] That's a, that's a technical explanation. Politically, it looks very bad. Politically, [1:37:40] it looks very bad because you will then be generating revenue equivalent to Homer Bay County. [1:37:46] Yeah. So you guys must figure out a way of managing that communication. We could go on and on, [1:37:55] but time will not allow us to go further than this because we still have three other meetings. [1:38:01] And we shall adjourn the meeting, but the clerk of the Senate will communicate on the information [1:38:07] that is required for us to be able to generate a report to the House. County Assembly, we congratulate you [1:38:15] for the work you have done. I think you have observed that we are not restricted to the report of the Auditor General. [1:38:21] Please also be guided by the financial statements. Ask this kind of questions. Do not allow quacks [1:38:28] to prepare financial statements in Kisumu. That's something that you guys can fix at the primary [1:38:34] oversight level. Prof, the meeting is adjourned. We wish you a safe journey back to Kisumu. [1:38:40] Thank you, Mr. Chairman. Members, I request that since it's already two o'clock, we just allow the delegation to [1:38:50] exit, and then we continue into the next meeting. So in terms of clerks, the...