Auditor General Exposes Rogue City County Employees Who Collude With Errand Lawyers To Rob Taxpayers 

  • Under Case No. MISC 368 of 2016, a review of documents revealed that the matter related to a dispute about 40.4 HA of land with an estimated value of Ksh.300m. However, the advocate forwarded a fee note amount of Ksh .348,510,400 which was higher than the value of the land 

By The Weekly Vision

Barely a week after the Controller of Budgets Dr. Margaret N. Nyakang’orejected a request for approval of Ksh. 1B made by the Nairobi County Finance CEC Charles Kerich’s to pay politically connected law firms, the Auditor General has released a new report revealing how certain law firms colluded with county staff to manipulate fee notes running into millions of shillings.

The Auditor General’s Report noted that the City-County Executive was exposed to a potential loss of Ksh. 3,383,218,730 in legal services sought from private advocates, whose legal fees were way above the legal fees set out in the Advocates Act. A review of twenty-three (23) sampled fee notes for various cases provided for audit however revealed significant discrepancies between the advocates’ fee of Ksh.3,428,367,610 and reviewed assessments by Management of Ksh.1,809,879,304 resulting in a variance of Ksh.1,618,488,306. 

For example, under Case No. E371 of 2020, the County Executive gave instructions to an advocate to defend the County in a consolidated matter seeking the nullification of the Nairobi City County Assembly Appropriation Act, 2020/2021. The County sought the services of a law firm and then raised a fee note of Ksh.1,675,485,000. The County revised the amount to Kshs.1,175,153,451, out of which Ksh.55,000,000 was paid to the advocate.

Office of The Governor Nairobi City County

However, a review of the Advocates Remuneration Act, of 2014 revealed that the advocate based his fee at a rate of 3% of the total budget value of Kshs.37,454,976,280 instead of the amount in dispute of Ksh. 6,073,343,662. Under Case No. ELC E011/2020, the matter relates to a dispute concerning 3 parcels of land in Kariobangi No. 90, 78 and 86 measuring 2 acres each, valued at Kshs.120,000,000. The advocate forwarded a fee note of Kshs.40,000,000. However, recalculation of the fee as per the advocates’ rate indicates the fee should not have been more than Kshs.10m, resulting in an excess charged fee amount of Kshs.30m. 

Under Case No. MISC 368 of 2016, a review of documents revealed that the matter related to a dispute about 40.4 HA of land with an estimated value of Ksh.300m. However, the advocate forwarded a fee note amount of Ksh .348,510,400 which was higher than the value of the land.  Also under E021 of 2021, review of documents Case No. E021 of 2021 revealed legal suit NBI ELRC Petition No. E021 of 2021, relating to a petition against the appointment of Liquor Board Members. Had the Legal Department of the City County advised the Governor and Management in respect of the appointment of the Board of Members, the City-County would not have lost an amount totalling Ksh .24m, related to the legal fees charged, on account of the petition.

Review of documents legal suit No. HCCCELC NO. 83/16 revealed that this legal matter related to a dispute arising from the double allocation of the same piece of land in Langata to Sidcup Enterprises and John Serewa, by the City County. However, the legal charges could have been avoided, had the City-County Management in charge of land allocation ensured that the piece of land was allocated to only one person.

A review of the documents provided revealed legal suit No. HC PET 179 of 2019 which related to a case between NCCE and Martin Shikuku, where land was invaded, subdivide and sold to third parties, whereby the City County was sued. The advocate handling this legal matter raised a fee note of Ksh. 55,691,850, a cost which would have been avoided, had the City-County Management not engaged in abuse of office which resulted in invasion, subdivision and sale of the land.

Under HCCC No. 1885, a review of documents provided revealed a legal suit against HCCC No. 1885 of 1992, which was partly paid as of the 2021/2022 financial year. This legal matter relates to a case where an officer of the City County allocated land with an estimated value of Ksh. 23,816,088 to the complainant and reallocated the same parcel to a different person thereafter. The total cost relating to this legal matter, including penalties of 18% p.a of Ksh. 23,816,088 charged from 1 October 1980 to date, claims of Ksh. 1,702,959,645 and architect, quantity surveyor and valuers’ fees of Ksh. 1,045,384 were charged to the County’s budget. The total cost amounting to Ksh. 1,704,005,029, is a cost which could have been avoided had the officer concerned not engaged in abuse of office.

The report adds that the county has a contingent liability of Ksh. 21,210,003 for firms engaged by the County Executive to provide legal services which excludes contingency liabilities of the defunct Nairobi Metropolitan Services (NMS). The report reveals that most of the legal costs arose from negligence on the part of County employees that exposed the County to loss of public funds as evidenced by the fee notes issued to the County for various legal cases.

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