The Ethics and Anti-Corruption Commission (EACC) has ordered all 47 counties to submit comprehensive anti-corruption strategies within 60 days in a move geared at reining in on corruption at the devolved units.
EACC on Saturday, September 2, issued two circulars to all governors and County Assembly Speakers, informing them of the decision and what the commission expects in line with the directive.
EACC Corporate Affairs and Public Communications Eric Ngumbi revealed that the commission has also deployed technical officers who will handle the five loopholes which have been identified as contributing factors to corruption.
Corruption Loopholes in Counties:
A photo of the EACC headquarters, at Integrity House in Nairobi.
1. Lack of Guidelines
The commission noted that one of the major challenges in the fight against corruption in counties is the lack of applicable guidelines in the management of county resources.
In particular, EACC noted that failure to develop policies and guidelines on asset management as provided for under Regulation 132 (3) of the Public Finance Management (County Government) Regulations, 2015 is a major setback.
2. Lack of Fixed Assets Registers
EACC claims that nearly all counties do not have a fixed asset register that provides a detailed list of all fixed assets owned by a devolved unit.
It is a valuable tool for tracking the value, location, and condition of assets, as well as for managing depreciation and ensuring compliance with accounting standards.
The information typically included in a fixed asset register includes asset identifier code, asset name, description, purchase and capitalisation dates, purchase cost and department or cost center.
It also captures residual value, asset life and depreciation rule, location, condition, maintenance history, insurance details and any other relevant information.
The commission noted that the available Fixed Assets Registers are not being maintained and/or updated.
EACC further observed that counties maintain a list of asset which are not comprehensive as they do not capture pertinent information such as serial number, value and location of the assets.
3. Property Registered on Defunct Local Authorities:
EACC also observed that a number of counties do not own the property under their custody. According to EACC, ownership documents for some assets, such as land, machinery, equipment and motor vehicles are registered in the names of the defunct Local Authorities.
The commission noted that such loopholes have led to grabbing, encroachment and theft of the assets which should be owned by the counties.
4. Lack of Inventory Management Systems
The circular sent to governors also shows that many counties do have an Inventory Management System (IMS), a software application that helps businesses track their inventory levels.
IMS is also used to track orders, sales, and deliveries. It can also be used in the manufacturing industry to create a work order, bill of materials, and other production-related documents.
The lack of Inventory Management Systems has forced some counties officials to use methods which are outdated, hence stores control records are not updated making it difficult to monitor movement/ utilization of the assets.
“The Commission says Asset Disposal Committees have not been constituted in some Counties to guide on the ‘disposal of surplus, obsolete and unserviceable assets.
“Further, most Counties have not prepared disposal plans resulting to deterioration in value, theft and misuse of assets,” EACC circular read in parts.
5. Insurance Fraud
EACC noted that insurance frauds have been going on in counties through insuring stalled and unserviceable vehicles and in other instances not insuring county assets.
The commission stated that insurance fraud often occurs when a claimant attempts to obtain some benefit or advantage they are not entitled to, or when an insurer knowingly denies some benefit that is due.
Other forms of insurance frauds in the counties include false or exaggerated claims, fraudulent billing, especially when a healthcare provider bills an insurance company for services that were not rendered, or they charge more than the standard rate.
“In this regard, every County Government entity is required to submit within a period of sixty (60) working days from the date of this advisory, an implementation plan for addressing the above challenges.
“The work plan should also address how the counties will adhere to the various provisions relating to the establishment and operationalization of the internal audit function in the Public Finance Management Act, 2012 and related Regulations, and update the Commission on a quarterly basis on the progress made to implement the plan,” the circular read in parts.
A photo of county governors at an induction session in Mombasa on September 17, 2023
Council of Governors