Meru Governor Isaac Mutuma was on the spot before a Senate committee on Tuesday as lawmakers pressed him to explain a raft of audit queries touching on revenue collection, pending bills, governance failures, and financial sustainability at the Meru County Revenue Board.
Appearing before the Senate County Public Investments and Special Funds Committee, chaired by Vihiga Senator Godfrey Osotsi, the Governor sought to defend the Board against concerns raised by the Auditor-General in the financial year ended June 30, 2025, insisting that reforms were underway to tighten accountability and seal revenue leakages.
At the centre of the scrutiny was a discrepancy in revenue records popped up as the report cast doubt on the completeness of collections made on behalf of the county.
The Auditor-General's review established that transaction commissions charged by a local service provider between July 2024 and April 2025 amounted to Sh18.67 million, a figure which, based on the commission rate, translated to approximately Sh389 million in revenue.
However, the County Receiver of Revenue system reflected collections of Sh365.28 million, leaving a variance that auditors said could not be independently confirmed.
Facing questions from senators, Governor Mutuma argued that the figures under comparison covered different reporting periods and therefore could not be used to draw a direct conclusion on revenue losses.
"The revenue collection period available for audit review... amounts collected through the system during the said audit period of Sixteen (16) Months," Mutuma said.
The Governor's appearance also revived concerns over the Board's handling of pending obligations after auditors questioned the omission of liabilities amounting to Sh42.45 million from the financial statements.
Particular attention was drawn to unpaid commissions owed to the Craft Silicon revenue collection platform, with senators seeking an explanation for why the obligations had not been disclosed.
In response, the Governor acknowledged the omission but said the liabilities stemmed from years in which no budgetary provision had been made to settle the commissions.
"It is indeed true that the board did not disclose payables of Shs. 20,935,209 payment for the Craft Silicon revenue collection system commissions for the financial years the board had not been allocated the budget to pay the commissions as payables. However, a budget has since been provided and the outstanding amount has since been settled," Mutuma acknowledged.
The audit report paints a troubling picture of the Board's financial health, highlighting accumulated losses, negative working capital and uncertainty over its ability to continue operating as a going concern.
Yet Governor Mutuma maintained that the institution was steadily recovering through aggressive revenue enhancement measures aimed at expanding the county's own-source revenue base.
"Meru County Revenue Board has embarked on revenue-raising measures aimed at ensuring that the Board increases revenue in line with the set targets, despite the challenges experienced. This will ensure that the Board operates with material certainty."
According to the Governor, the county has already adopted new tariff and pricing policies, intensified revenue mapping, strengthened collaboration with county departments and launched enforcement operations designed to curb revenue leakages across sub-counties.
The committee also examined a series of governance and compliance concerns flagged by auditors, including unsupported expenditure, unsupported receivables, conflict of interest in revenue collection, the absence of an approved strategic plan and a wage bill that exceeded the legal threshold.
Auditors questioned expenditure amounting to Sh15 million for which supporting documents were initially unavailable. The Governor told senators that the relevant payment vouchers had since been submitted for verification.
Questions were also raised over the role of municipalities and county departments in collecting revenue, with auditors warning of a possible conflict of interest. However, the Governor dismissed the concerns, arguing that while various county entities collect revenue, the Meru County Revenue Board remains the sole receiver of county revenue.
The Senate committee further heard that the Board is operating without an approved strategic plan, a requirement under public finance laws. Governor Mutuma told lawmakers that a draft plan had already been prepared and was awaiting approval by the Board.
The Governor also faced questions over a wage bill that consumed 76 percent of total revenue, more than double the statutory ceiling of 35 percent prescribed under public finance regulations.
While admitting the breach, he attributed the situation to revenue constraints and staffing challenges, arguing that efforts to boost collections would gradually improve the ratio.
The hearing marked one of the most comprehensive examinations of the Meru County Revenue Board's operations in recent years, with senators signalling that they would closely interrogate the responses before determining whether the Board has satisfactorily addressed the Auditor-General's concerns.
As the committee continues its review, the spotlight remains firmly on whether the county's promised reforms will be enough to restore confidence in the management of public revenue and reverse the financial weaknesses exposed by the audit.