Twelve county governments have been flagged by Auditor General Nancy Gathungu for failing to account for imprests amounting to Sh229.4 million in the 2023/2024 financial year.

The report shows that some officers held multiple imprests in violation of the Public Finance Management (County Governments) Regulations, 2015.

Regulation 93(5) requires that temporary imprests be surrendered or accounted for within seven working days after returning to the duty station. In addition, Regulation 93(8) bars the issuance of new imprests to an officer before surrendering or recovering outstanding ones in full from their salary.

The audit further revealed that Sh28.6 million — Sh18.3 million in Kakamega and Sh10.3 million in Nyandarua — was not recorded in imprests registers.

The report states: “The County Executives failed to maintain an imprests register indicating details of the payee, amount issued, imprests warrant numbers, dates of issue, due dates and dates of surrender contrary to Regulation 93(4) of the Public Finance Management (County Governments) Regulations, 2015 which requires that upon issuance of imprests, the details of the applicants should be recorded in an imprests register.”

The counties with the highest outstanding imprests were Turkana (Sh85 million), Samburu (Sh39.3 million), Mombasa (Sh25.8 million), Bungoma (Sh21.6 million), Tana River (Sh19.8 million), Embu (Sh12.8 million), Siaya (Sh6.3 million), Nandi (Sh6.3 million), Kisumu (Sh5.1 million), Nyandarua (Sh3 million), Busia (Sh1.3 million) and Kiambu (Sh801,440).

Beyond the imprest issue, the Auditor General raised broader concerns over non-compliance with laws governing the management of public resources, citing gaps in accuracy, completeness and reliability of financial statements.

The report stresses: “The complex modern environment demands greater accountability, transparency, and effective governance as envisaged in Goal 16 of the Sustainable Development Goals (SDGs). Effective governance requires structures that respond to the needs of the citizens and enhance compliance with the laws and regulations governing prudent public financial management, which the County Executives are urged to adhere to.”

Other flagged issues include breaches of fiscal responsibility principles, excessive wage bills, non-adherence to the one-third basic salary rule, failure to meet the 30 percent ethnic diversity requirement in staffing, and overrepresentation of certain ethnic groups in county employment.

The payroll review for the year ending June 30, 2024, found that in 38 County Executives, 22,893 employees earned net salaries below a third of their basic pay, a sharp rise from 10,518 in the previous year.

While county management attributed this to new deductions under the Social Health Insurance Fund, National Social Security Fund, and Housing Levy, the report notes this violates Section 19(3) of the Employment Act, 2007, which caps total deductions at two-thirds of an employee’s wages.

On ethnic composition, 33 counties had more than one-third of their staff from a single ethnic community, with Nyandarua at 96 percent, Elgeyo Marakwet at 95 percent, and Kisii, Nyamira, Nandi, Kericho and Nyeri each at 94 percent.

This breaches Section 7(2) of the National Cohesion and Integration Act, 2008, which limits such representation to one-third.

The report also shows that 13 counties failed to meet the 30 percent ethnic diversity requirement in new appointments as per Section 65(1)(e) of the County Governments Act, 2012.

In addition, 40 counties exceeded the wage bill limit of 35 percent of total revenue, with Kisii at 68 percent and Taita Taveta at 66 percent, contrary to Regulation 25(1)(b) of the Public Finance Management (County Governments) Regulations, 2015.