How counties are losing billions to legal battles, poor financial decisions; Auditor General
Auditor General Nancy Gathungu. A new audit by Auditor General Nancy Gathungu has exposed how counties prioritise settling hefty legal fees while neglecting other pending bills
Auditor General Nancy Gathungu has exposed how counties prioritise settling hefty legal fees while neglecting other pending bills.
Counties across Kenya are facing financial strain due to escalating legal costs, with law firms reaping millions from legal battles and poor governance decisions.
A new audit by Auditor General Nancy Gathungu has exposed how counties prioritise settling hefty legal fees while neglecting other pending bills.
The audit revealed that counties paid billions in legal fees, often to firms not selected through a competitive process, raising accountability concerns.
Despite the law requiring counties to establish the Office of the County Attorney to handle legal matters, many have yet to comply, leading to mounting litigation costs and accruing interest from delayed payments.
In Nairobi, four advocates are owed a staggering Sh6.3 billion, making up 29 percent of the county’s total outstanding legal fees of Sh21.4 billion.
The pending cases primarily stem from disputes over unpaid claims, irregular contract terminations, and procurement malpractices.
“Further, the pending legal fees amounting to Sh21,371,004,293 represent 11 percent of the total County Executive’s pending bills,” noted Gathungu.
In Kajiado, Governor Joseph Ole Lenku’s administration is under scrutiny over Sh79 million in legal fees, with the Auditor General demanding further clarification.
“The Executive incurred an avoidable expenditure of Sh1,468,651 in interest decreed by the court due to failure by the Accounting Officer at the Treasury to pay an advocate’s legal fee of Sh4,128,359 in a timely manner,” said Gathungu.
By November 2024, only half of the amount had been settled, exposing the county to potential financial liabilities.
In Kilifi, Governor Gideon Mung’aro faces Senate scrutiny over questionable financial dealings, including Sh71 million in legal fees and Sh672 million in civil works.
Mombasa Governor Abdulswammad Nassir’s administration is grappling with unexplained payments of Sh67 million in legal fees.
Court rulings
The audit revealed that the county’s liability continues to increase due to failure to honour court rulings.
“The County failed to settle the balance of Sh8 million with a motor vehicle sales company, which had accrued decretal sums, costs of the suit, and interest totalling Sh68 million,” added Gathungu.
Kisumu County also came under fire after the audit flagged Sh46 million in unsupported legal expenses. “A review of the expenditure revealed that payments totalling Sh22,496,355 lacked crucial supporting documents, including lists of pending cases, outstanding fees, procurement records, case proceedings, and court attendance evidence,” the Auditor General’s report stated.
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Additionally, the county engaged legal consultants without the required approval, violating the Office of the County Attorney Act, 2020.
Similarly, in Machakos, Sh38.8 million was paid to four law firms for previous and current year legal fees, yet relevant case files were not provided for audit, leaving Sh20.5 million in legal fees unreconciled.
Uasin Gishu County, despite having an Office of the County Attorney, spent Sh22.2 million on external legal representation, raising concerns over unnecessary spending. The audit showed that out of Sh25.6 million allocated for legal costs, a significant amount went to private advocates instead of in-house legal staff.
In Marsabit, poor legal decisions saw the county spend Sh10 million in legal fees in 2024, even as it defended a case where the plaintiff had sued for just Sh1 million in damages.
The audit revealed that Sh2.8 million in legal fees lacked a breakdown to justify compliance with the Advocates Remuneration Order of 2014.
“There was no evidence of the application of the Advocates Remuneration Order of 2014 for determining legal fees. The fees amount of Sh3.3 million was charged as legal fees for a compensation case, an amount disproportionate to the claimed damages of Sh1,028,000,” said Gathungu.
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