Auditor General Nancy Gathungu has called the Judiciary to account for the administration of a Sh350 million staff housing loan, the non-remittance of Sh470 million in revenue, and the loss of Sh90 million generated through the courts.
Gathungu stated in her report that the Judiciary failed to provide documents relating to the loaning scheme for audit, so she was unable to determine whether it complied with the guidelines and the law.
“…the statement of receipts and payments reflects an expenditure of Sh350,000,000 under other expenses, which relates to housing loans to staff,” according to the report.
“However, the Judiciary did not prepare and submit to the Auditor General the financial statements for the Housing Fund for audit.”
According to the report, this was an abuse of the Judiciary mortgage fund scheme regulations, which require the fund’s statement of accounts to be prepared, signed, and transmitted to the Auditor General for the fiscal year.
It concludes by stating that the management violated the law.
It also reveals that the Judiciary failed to remit Sh476,031,828 in revenue collected from the public.
The funds were collected in May and June of last year.
“… the statement of financial assets and liabilities shows a balance due for disbursement to the Exchequer of Sh476,031,828.”
The unremitted revenue as of June 30, 2021, is for collections in May and June of that year.”
According to the report, the action was illegal because the failure to promptly disburse the revenue collected to the Exchequer violates regulation 81(2) of the Public Finance Management Regulations, 2015.
According to the regulation, “the Receiver of Revenue shall promptly pay the revenue received into the Consolidated Fund as soon as possible and in any case not later than five days after receipt.”
The report also mentions a loss of revenue deposits from court stations in Embu, Nakuru, and Malindi totaling nearly Sh90 million that cannot be accounted for.
It claims that the nature of the cash loss and the recovery strategies employed by the judiciary in the matter were not clear because it was not specified.
“The bank reconciliation statements for the month of June 2021 for the bank accounts for Embu, Nakuru, and Malindi court stations reflect losses of Sh2,682,152, Sh84,588,258 and Sh1,455,800, respectively, that occurred in previous years,” according to the report.
“However, the nature of the loss, recovery strategies, and court proceedings were not disclosed.”
According to the report this makes it difficult to confirm whether the Sh7 billion cash balance correctly reflected in Judiciary accounts was accurate and complete.
