The Auditor General has issued an adverse opinion on the revenue statements of the County Government of Tana River, revealing a deeply flawed financial management system marked by missing records, unexplained variances, unsupported revenues, and outright breaches of the law. The findings paint a concerning picture of a county struggling with basic accountability, transparency, and compliance in handling public funds.
One of the most fundamental failures highlighted in the audit is the complete absence of prior year revenue statements, a direct violation of Section 165 of the Public Finance Management Act, 2012. This law requires counties to prepare and submit annual revenue accounts, including statements of receipts, disbursements, and arrears. The failure to do so means there is no reliable baseline for comparison, making it impossible to track financial performance or ensure continuity in reporting. As a result, the Auditor General could not confirm the accuracy or completeness of the current financial statements.
Beyond missing reports, the audit uncovered widespread inaccuracies in the revenue statements themselves. Multiple revenue streams—including cess, business permits, property rent, market fees, and natural resource exploitation—showed discrepancies between reported figures and supporting schedules. Even seemingly small inconsistencies, such as bank charges and disbursements to the County Revenue Fund, were left unexplained. More significantly, the county reported zero arrears in its main statement, yet separate notes disclosed arrears of KSh 184.6 million, exposing a major contradiction in official records.
The report also highlights unsupported own-source revenue, with the county declaring KSh 64 million in revenue that could not be fully verified. Bank statements showed a higher figure of KSh 65.2 million, leaving an unexplained variance. Key revenue streams lacked essential documentation, including registers, applications, daily breakdowns, and payment records. For example, cess revenue could not be justified because the county’s weighbridges—the basis for such charges—were either incomplete or non-functional. Similarly, business permit collections lacked supporting applications and proper categorization, making it impossible to verify how the revenue was generated.
Critical gaps were also identified in land and property-related revenues. The county reported land rates of KSh 5.57 million without providing an updated valuation roll, while property rent collections lacked a supporting register of plots. Parking fees were also unsupported, with no record of designated parking spaces or revenue collection devices. These omissions suggest a system where revenue is being recorded without verifiable backing, increasing the risk of leakages and mismanagement.
Financial position reporting was equally weak. The county reported a bank balance of KSh 6 million, yet failed to provide a certificate of bank balance to support the figure. Without such documentation, auditors could not confirm whether the funds actually existed or were accurately reported.
The audit further revealed serious legal violations in revenue collection practices. The county continued to rely on the Finance Act, 2020 to collect revenue, instead of enacting a new Finance Act for the financial year under review. This directly contravenes the Public Finance Management Act, which requires counties to approve new revenue-raising measures annually. Operating without an updated legal framework undermines the legitimacy of all revenue collected during the period.
Human resource practices within the revenue department were also found to be irregular. The county had engaged a large number of casual workers—many serving for over ten years—despite policies limiting such employment to short-term engagements of no more than three months. This not only violates public service regulations but also raises concerns about accountability, oversight, and potential exploitation within the workforce.
Another major concern is the failure to collect significant outstanding revenue, particularly from government-linked entities. While the main statement showed only KSh 200,000 in arrears, detailed records revealed that KSh 184.6 million was owed by parastatals such as the National Irrigation Authority, KETRACO, and ADC Galana Ranch. No evidence was provided to show that the county had taken steps to recover these funds, indicating a lack of enforcement and revenue follow-up.
Perhaps one of the most critical structural weaknesses identified is the complete lack of automation in revenue collection. The county relies entirely on manual systems, using miscellaneous receipt books instead of digital platforms. This approach is highly vulnerable to errors, fraud, and revenue leakages, and directly violates regulations requiring effective internal control systems.
At the County Revenue Fund level, further inconsistencies were identified. Financial statements did not comply with international public sector accounting standards, particularly in explaining budget variances. Additionally, transfers from national and donor-funded programs—such as DANIDA, climate action funds, and agricultural support projects—showed significant unexplained differences between amounts sent and amounts received.
Transfers to the County Assembly also raised concerns, with a KSh 50 million variance between what the county reported as transferred and what the assembly reported as received. Such discrepancies highlight poor coordination and reconciliation between government entities, further weakening financial oversight.
Overall, the Auditor General’s findings reveal a system plagued by missing records, unsupported revenue, weak controls, legal non-compliance, and poor accountability mechanisms. The adverse opinion issued is a strong indication that the county’s financial statements cannot be relied upon, and that urgent reforms are needed to restore order in revenue management.
If left unaddressed, these issues could continue to undermine service delivery, erode public trust, and expose the county to financial losses. The report serves as a critical wake-up call for Tana River County to strengthen its financial systems, enforce compliance with the law, and ensure that every shilling collected is properly accounted for.
