The High Court has ordered former Homa Bay County Assembly clerk Bob Otieno and a couple, Lilian Aloo and her husband, to jointly refund Sh12.57 million in public funds paid into their joint bank account for work the court found was not adequately proved.
In a judgment delivered on October 16, 2026, Justice Benjamin Musyoki ruled that the three were liable for the loss, ordering them to pay the full amount with interest at court rates from the date the suit was filed, as well as the legal costs incurred by the Ethics and Anti-Corruption Commission’s (EACC).
The judgment followed an EACC suit filed on April 11, 2022, seeking recovery of the money, interest and costs.
The EACC presented 12 witnesses, including procurement, human resource and finance officials, bank representatives and forensic investigators.
The case arose from payments made between 2015 and 2017, which the EACC said were irregularly channelled through a salary suspense account into an account held jointly by Aloo and her husband.
The commission traced the funds from three accounts associated with the county government and Assembly at the Central Bank of Kenya and Co-operative Bank.
The money was transferred through an Equity Bank suspense account before reaching the couple’s joint account, from which the husband withdrew it.
Aloo was a teacher employed by the Teachers Service Commission and had never worked for the Assembly.
Assembly human resource officials confirmed she was not an employee, while the payroll manager told the court that payments to her account had been recorded as salaries despite her not being on the payroll.
The EACC also presented evidence that its investigators found no invoices or payments in Aloo’s favour in the Integrated Financial Management Information System (IFMIS).
Procurement officials said they had not found tender documents, advertisements, requisitions, bids, evaluation minutes or award letters to support the disputed payments.
In their joint defence, the three defendants denied wrongdoing and argued that the suit was sub judice because of another EACC case involving Otieno and four others.
They maintained that the money was payment for services provided to the Assembly by Damila Enterprises, a business owned by the couple, rather than salaries paid to Aloo.
Otieno said the Assembly had engaged the business through direct procurement to provide funeral services following the deaths of three Assembly members, Boaz Ondiek, Monica Amolo and Jessica Owidi.
According to Otieno, Damila Enterprises was engaged to provide catering services for the funerals.
He denied that the payments were fraudulent arguing that the payments were made after departmental approvals and that the couple had requested payment into their joint account because of tax issues affecting another account.
Aloo denied receiving a salary from the Assembly and said she was not involved in running the business.
Her husband testified that Damila Enterprises provided services including catering, construction and stationery to the Assembly and county executive, and that some payments were directed to their joint account on his instructions.
He said the Assembly had paid the business about Sh7 million, with the balance coming from the county executive.
However, the court found that the defendants had not adequately accounted for the money.
Their explanations differed on the amount allegedly received for funeral services, while documents presented to support the work accounted for only Sh7,106,890, leaving Sh5,464,276.50 unexplained.
“In that regard, even if I were to accept that the payments in question went to the alleged services, the Defendants have not explained the difference of Sh5,464,276.50,” Justice Musyoki said.
The judge also found that the existence of contracts did not establish that the work had been completed.
Although the defendants presented agreements relating to renovations, perimeter walls, landscaping, cabro works, offices and roofing, they did not provide sufficient evidence, such as completion certificates or other records, to prove that the work had been done.
The court rejected the explanation that procurement records were unavailable because of an EACC raid and a subsequent fire at the Assembly offices.
It also found that the defendants had not demonstrated compliance with the legal requirements for emergency direct procurement under the Public Procurement and Asset Disposal Act.
The judge further questioned the claim that tax difficulties had necessitated payments into the couple’s joint account, noting that the tax demand and assessment letters relied on were dated 2023, years after the last disputed payment in December 2017.
The court also considered transfers to Otieno following payments to the couple. The defendants said these were repayments of a loan to the husband, but the judge found no evidence that such a loan had been advanced.
The judge said the timing of the transfers, which followed Assembly payments almost immediately, supported the finding of fraud.
In determining liability, Justice Musyoki cited the Public Finance Management Act, which places responsibility on county assembly accounting officers to oversee public finances, promote transparency and ensure proper management and accountability for public resources.
He also relied on constitutional and statutory provisions making public officers personally liable for losses arising from unlawful use of public funds, fraudulent conduct or negligence.
The judge said as the assembly’s accounting officer, Otieno had a duty to ensure public funds were properly spent and contractors paid for work performed.
The judge found that Otieno had authorised the payments and that letters awarding catering tenders were authored by him.
“The existence of a contract is not proof of work done,” the judge said, adding that public funds could not be paid to individuals without commensurate services or benefits to the public.
The judge found that the couple had received money for work that had not been proved.
“It cannot be normal when public coffers are being emptied and depleted to pockets of individuals when the public did not receive commensurate services or benefits for the same,” Justice Musyoki said.
The court consequently found all three defendants jointly and severally liable for the Sh12,571,166.50 loss.
The EACC had sought recovery of the full amount, together with interest and costs, in a plaint dated April 11, 2022.
In the final orders, Justice Musyoki entered judgment in favour of the commission for the full amount, directed that interest accrue at court rates from the date the suit was filed until payment in full, and awarded the commission costs of the case.
The judgment was delivered at the Milimani Law Courts in Nairobi in the presence of counsel for the EACC and the first defendant, while Aloo and her husband, identified in the judgment as the third defendant, were absent.
