A new audit has exposed how more than 20 county governments across Kenya spent over Sh15 billion on legal fees, travel, and allowances, despite struggling to deliver essential public services.

In her report for the financial year ending June 2024, Auditor General Nancy Gathungu raised alarm over widespread misuse of public funds, questionable project spending, and unchecked legal costs that she warned were hurting economic progress and weakening service delivery.

“Despite numerous reports indicating a lack of accountability and inadequate documents to support the legality and effectiveness in the use of public resources, failure to apply the requisite sanctions has resulted in some accounting officers not adequately accounting for public resources,” the report states.

Nairobi County leads in legal fees, with Sh6.2 billion owed to just four advocates. This figure represents 29 per cent of the county executive’s total pending bills of Sh21.4 billion.

Most of these cases involve unpaid claims for completed work, illegal staff dismissals, flawed procurement, and poor contract oversight.

“The judgments entered against the County Executive resulted in a high cost of litigation and interests,” reads the report, which also shows Nairobi has 1,086 active legal cases. If these liabilities materialise, the county could face serious cash shortages that may paralyse operations.

Questions were also raised about how legal work is distributed. While Nairobi had 350 prequalified lawyers, 65 cases were handled by only eight of them. “Management did not provide an explanation for the criteria used to allocate multiple cases to the eight (8) advocates,” it adds.

Nairobi was also cited for duplicate payments worth Sh140 million, and irregularities in the payroll system, where thousands of employees appeared to share bank details. In April, May, and June 2024, 7,777, 6,123, and 6,803 officers respectively had the same bank accounts, agent and branch codes.

Additional payroll concerns included 74 employees with identical names, six on the payroll but without pay, overpayments of Sh5.3 million, and Sh8.4 million paid above salary limits.

Tax deductions were also skipped for workers receiving a total of Sh148.6 million.

In Mombasa, the county was flagged for spending Sh67.5 million on legal fees, which has grown over time due to failure to comply with court rulings.

In one instance, the county failed to pay a car sales firm Sh8 million, resulting in accumulated costs and interest of Sh68.6 million.

In another case, the county owed Sh854,926 to a contractor for works done in 2006.

This has ballooned to Sh1.2 million. “The expenditures could have been avoided if the County had honoured the claims after the court rulings. In the circumstances, the value for money on the expenditure could not be confirmed,” the report reads.

Gathungu also flagged Mombasa for domestic travel and subsistence expenses totalling Sh17 million, with Sh10.6 million spent by the economic planning department, Sh4.1 million by the Public Service Board, and Sh2.2 million by the education and finance departments.

Kilifi spent Sh71.6 million on legal services involving six private practitioners, while Nakuru paid Sh22.6 million to six law firms without proper supporting documents.

Mandera was flagged for spending Sh45.5 million on legal services. Tana River paid Sh30.7 million to four legal firms representing the county executive.

In Kisumu, Sh46 million was spent on legal matters, while Kiambu’s contingent liabilities from lawsuits stood at Sh517.3 million.

Murang’a County was flagged for unsupported hospitality and supplies costs of Sh631,884, imprest issues totalling Sh2.7 million, and project implementation anomalies of Sh543.4 million.

In Kiambu, irregular travel and subsistence payments added up to Sh96.1 million. Another Sh24 million was paid without verification or audit.

Kirinyaga was flagged over irregular revenue collectors' allowances amounting to Sh4.3 million.

These included payments for breakfast, weekend work, out-of-hours duties and taxi costs, even though there was no approved policy guiding such payments.

The Auditor General concluded that the misuse of funds and failure to act on previous audit concerns not only increases public debt but also continues to affect critical county services and development programs.