Audit flags Sh2 billion in unaccounted expenditure across 11 government entities

More than Sh2 billion in public and donor funds spent in the 2023/2024 financial year cannot be accounted for by 11 government institutions, a new audit report has revealed.

Auditor General Nancy Gathungu said Sh783.9 million of the unsupported expenditure came from Ministries, Departments, and Agencies, while Sh1.26 billion was linked to donor-funded projects.

The report raises concern over weak internal controls and failure to observe financial regulations, exposing public funds to the risk of loss, misuse, or theft.

Among the donor-funded projects flagged in the report is the Bogoria Silali Geothermal Project, which accounted for the largest unsupported amount at Sh980.9 million.

Of this, Sh535.6 million was spent by National Oil of Kenya and Sh445.29 million by Galana Energies Ltd, without documentation.

The report also cites the Financing Locally Led Climate Action Programme, which posted Sh123 million in unsupported domestic travel and subsistence allowances.

Other flagged projects include the Secondary Education Quality Improvement Project, which recorded Sh60.3 million in unsupported spending due to lack of oversight in construction works, and the Improvement of Rural Roads and Market Infrastructure project under the Kenya Rural Roads Authority (KeRRA), which had Sh35 million in unaccounted consultancy services.

In total, the report highlights widespread lapses in both government-run and donor-supported projects.

The Technical Support Programme Project was flagged for Sh914.5 million in unsupported refunds to the European Union, while the USAID Boresha Jamii Project had Sh23.6 million in fringe benefits that lacked proper documentation.

Government departments were not spared.

The State Department for Social Protection could not support claims worth Sh986 million in domestic travel and subsistence, Sh41.28 million in cash payments, and Sh25.27 million in fuel expenses.

The Economic Planning department failed to justify Sh195.2 million in training costs, while the Department of Irrigation could not account for Sh9 million in fuel expenditures.

The Judiciary, which was also flagged in the report, posted Sh406.7 million in unsupported spending, including personal allowances, leave allowances, and foreign travel expenses.

Other irregularities include Sh2.86 million in field activities under the Africa Centre of Excellence in Sustainable Use of Insects as Food and Feeds Project, Sh2.81 million in training services under the Global Fund Tuberculosis Programme, and Sh1.5 million in fuel spending under the Horn of Africa Groundwater for Resilience Project.

Gathungu warned that failure to produce the required documentation violates Section 68(1) of the Public Finance Management Act, which mandates that public funds be used lawfully and transparently.

“Failure by the entities to fully support payments casts doubt on the authenticity of the reported expenditure,” she said, adding that these financial gaps indicate weak governance and control systems.

She also reminded public officers that under the Public Audit Act, anyone who fails to provide required information or submits false data without valid reason may face a fine of up to Sh5 million, imprisonment for up to three years, or both.

The Auditor General has recommended immediate remedial steps, including improved oversight and stronger financial systems to protect public and donor money from further exposure.