Millions of shillings in revenue collected in Nairobi are being diverted to the benefit of senior government officers, governor Johnson Sakaja and senior finance officers at the county.
It can now be revealed that the Kenya Revenue Authority has been in a secret agreement with governor Sakaja to ‘help’ the county in revenue collection as it transitions from the services of the Nairobi Metropolitan Services and the tax collecting agency.
This is despite Governor Sakaja going public to declare that the county was fully in charge of revenue and that collections have improved compared to past years.
EACC in October said senior officials in the devolved units are using a revenue collection system to divert county revenues by colluding with service providers, resulting in the loss of billions of shillings.
Nairobi Governor in August announced that the role of revenue collection had been reverted back to the county government from the national government.
Speaking at the City Hall parking area when he for the first time met county workers, Sakaja said Kenya Revenue Authority (KRA) officials will no longer collect revenue.
The move to strip off KRA the role, according to Sakaja, was informed by the fact that the taxman was not meeting the set targets previously attained by county officials.
In March 2020 KRA took over the role with officers being given full and unlimited access to county revenue processes, information data and systems.
Shockingly, an ad hoc committee probing revenue collection was shocked to hear that KRA was still in charge of revenue collection after agreement with Sakaja.
KRA Deputy Commissioners Anastacia Gathubi told the committee that nine commissioners were in charge of revenue collection in Nairobi.
Gathubi told the committee chaired by Majority Leader Peter Imwatok that Governor Sakaja on his own personal decision requested that the commission provide nine Commissioners to help transition the process of revenue collection.
This is despite the lack of any legal framework under which the commission can take charge of revenue collection.
“Yes we agree the deed of transfer ended but governor Sakaja requested KRA to help in the transition process that is why we are still offering our services, “she added.
The announcement shocked the committee with Peter Imwatok noting that the assembly had not approved any extension and termed the move an illegality.
“Madam Anastasia, as Members of this county assembly we did not approve such an extension, how comes you decided to enter in an illegal MOU with Sakaja,”Imwatok asked
Members of the committee reminded the KRA officials that the Deed of Transfer of functions the county entered into with the national government ended in 2022.
“Yes we agree the deed of transfer ended but governor Sakaja requested KRA to help in the transition process that is why we are still offering our services, “she added.
The KRA officials further revealed that they are not aware where the servers of the revenue systems are located to the shock of the ad hoc committee members.
The revelations sparked concerns with the MCAs suspecting adverse revenue diversion.
In October this year, the Ethics and Anti-Corruption Commission( EACC) listed Nairobi as among the counties leading in revenue diversion with Narok, Kajiado, Machakos and Kilifi following respectively.
The commission said private service providers have total control over revenue management systems, making it difficult to ensure accountability.
According to the commission, senior county officials have access to super user rights on the automated system with the power to delete and edit the amount of revenue collected, leading to diversion.
In the Nairobi case as revealed by KRA,the commissioners handling revenue collection are domiciled at KICC with the offices being funded by City Hall.
Shockingly, Finance Chief Officer Asha Abdi who was also present denied that City Hall is paying rent for the offices.
The suspected diversion is said to be handled by senior government officers who have access to the system.
Governor Sakaja, Finance Executive Charles Kerich and Chief Officer Asha Abdi also have access to the system.
Both Kerich and Asha were present during the public hearing session.
Chief cashier of Nairobi City County Shadrack Nyamai who is also suspected to be a big beneficiary stated the county was still using the KRA account which was never deactivated.
She confirmed that KRA personnel, Asha Abdi, and the Head of Treasury, Martha Wambugu are the signatories to the account.
Documents that previously been tabled before the ad hoc committee indicated the contract for NRS — put in place by the Kenya Revenue Authority (KRA)— expired in March 2022 but was extended for a further six months to September 2022.
After the expiry of the term of service in September, the taxman handed over the revenue collection function to the county.
In September 2022, Nairobi Metropolitan Services officially handed over the transferred functions back to City Hall putting Governor Sakaja in full control of the 14 functions of the county.
Her admission indicates that the county is not fully in charge of revenue adding weight to allegations by Kileleshwa MCA Robert Alai, that some unknown people are in charge of revenue collection in the county.
At Muthurwa for example, it emerged that the revenue officers collect money and have decide how much to pay to Governor Sakaja’s administration via a paybill number.
The revelations emerged a day after the county’s urban planning and parking fee revenue team on Wednesday revealed that the county is also losing millions through cash reversals by property holders.
Some of the committee members alluded to possible collusion between property holders,motorists and revenue officers in cash reversals.
Lucy Kanini, the officer in charge of loading zones admitted to the committee that the habit has been going on for a while.
She said that out of the nearly 180,000 properties in the new system, 177,000 are contributing to the revenue pool, leaving a notable gap.
This comes as multiagency operatives are investigating multiple corruptions and ongoing supply of hot-air at Nairobi City County.
Some of the county staff that are under scrutiny includes, Kevin Musamia who was employed as a clerical officer after working for long as an attache under roads and public works.
Kevin, who is known to be an extravagant spender on women’s life luxuries indirectly owns a company by the name Felista Queen Akosa that is managed by his mother.
Vivian Mavua, Beth Muthoni, Brian Oyando, Ambrose Musau, Denis Muia the one who does work plans for the county, Richard Mogoko the head of procurement who has gained massive from corruption dealings, his main clients are suppliers and contractors from the Somali community and a few Kikuyus, he is currently building state-of-the-art-house.
Others are Stephen Mafura, Mary Maina Wangui girlfriend to former acting county secretary Jairus Musumba, Peter Gitau from procurement, Martha Wambugu among others.
Detectives are also pursuing similar cases where huge amounts of money are being wired direct to county officials from suspected corruption dealings.
It also emerged that a contractor by the name Mohammed Ibrahim Siyad who owns rogue and unqualified companies like Buko investments is at the centre of the deal that saw the bank turn away the senior county officers.
Milbo Lakes Enterprises owned by Millicent Ndinda Ngumbi are also reaping big from dubious payments at City Hall.
The MCAs who have all the details want the EACC and DPP to quickly act on the matter.
The development comes at a time when the Director of Criminal Investigations(DCI)Mohamed Amin has publicly questioned how nine other companies were paid millions without proper procedure.
The massive corruption at City Hall has become so pronounced and some MCAs are questioning the role of independent institutions that have been investigating officers especially at the Finance and Procurement Departments.
The county executive is also under scrutiny for misuse of bank overdrafts that do not meet merit from the county assembly and as required by the PFM Act.
Those on the spot over this are Charles kerich, some county assembly leadership among others.
The county assembly is now increasingly getting convinced that governor Sakaja has failed to demonstrate capacity to run the city.
They are also accusing him of misusing funds aimed at taming environmental pollution,and the influx of cartels at City Hall.
“He is going home if this continues and I am personally going to lead a signature collection to impeach him,” Kariobangi North MCA Munuve said.
Korogocho MCA Abisalom Odhiambo alias Matach said Sakaja and his finance officials have only 24 hours to release the funds failure to which they will paralyze operations at City Hall.
Gatina MCA Kennedy Swaka is on record saying Governor Sakaja is taking MCAs for a ride by playing hide and seek games while at the same time promising ‘heaven’.
“The governor is playing ping pong games with our minds and we have to put an end to this,” Swakwa said.
Kileleshwa MCA Robert Alai has been vocal and has already dismissed the governor as a big joke.
Alai has observed that Governor Sakaja has no full control of the revenue collection system and that the national government through the National Intelligence Service was allegedly in charge.
“The fact that the governor claims the NIS is collecting revenue is shameless.The governor does not even know who is collecting revenue,” Alai ranted.
