Governor Anyang’ Nyong’o has issued a response to a damaging report from the Daily Nation, which listed Kisumu as the county with the highest value of voided transactions among 15 devolved units.
In the report published on Sunday, April 20, concern was raised over Ksh13 billion in pending bills across several counties, sparking alarm.
According to the report, Kisumu County led in voided payments, as an audit reportedly exposed 4,127 cancelled transactions valued at Ksh2.67 billion.
But in his statement, Nyong’o denied claims that voided payments equated to financial misconduct or diversion of funds. Instead, the governor explained that it was simply a routine end-of-year accounting procedure.
“As indicated by the Principal Secretary of the National Treasury in the same article, voided payments are transactions cancelled after full processing due to insufficient funds in the County Revenue Fund (CRF),” Nyong’o explained.
Governor Nyong'o further clarified that the Integrated Financial Management Information System (IFMIS) needed to be cleared of the voided (cancelled) transactions to facilitate the addition of a new budget for a new financial year.
Voided payments, according to the governor, mainly occurred in his county because of insufficient funds in the County Revenue Fund (CRF) account at the Central Bank.
The financial shortfalls were due to two main factors - delayed June disbursements and a shortfall in own-source revenue (OSR).
In the Daily Nation's report, 15 counties cancelled 15,008 transactions valued at Ksh13.26 billion, with the publication saying the transactions were cancelled "after Treasury and the controller of budget (COB) approved the counties to pay contractors and suppliers who were scrutinised and proved to be legitimate."
But Nyong'o denied any malice, dismissing the notion that voided payments were a sign of graft, instead saying there was a challenge in counties, including Kisumu, balancing fiscal discipline with service delivery.
“Clearly, voided payments point to a financial management challenge in counties that needs to be addressed. But in Kisumu’s case, it is not misuse of funds,” his statement went on.
In his statement, Nyong'o acknowledged some parts of Nation's article as factual, including a piece stating that the National Treasury is taking steps to address the issue of voiding payments.
Besides Kisumu, Kajiado and Busia rounded off the top three counties with the most cancelled payment transactions valued at Ksh2.28 billion and Ksh2.16 billion, respectively.
