The Hustler Fund is under renewed scrutiny after the Auditor General revealed that Ksh8 billion allocated in the 2022/2023 financial year cannot be traced.

The State Department for Cooperatives spent only Sh12 billion out of the approved Sh22.96 billion budget, leaving a gap of Sh8.2 billion that was never requested or utilised.

Appearing before the Public Accounts Committee, Cooperatives Principal Secretary Patrick Kilemi blamed the missing funds on transitional confusion during the early days of the Kenya Kwanza government.

He explained that since the State Department for MSMEs was not fully integrated at the time, his department was temporarily tasked with initiating the Hustler Fund.

“I was tasked to initiate the process of the Hustler Fund as the State Department for MSMEs was getting established. That’s why I received the funds on behalf of that department and now find myself responding to questions about what transpired at the time,” he said on Wednesday.

Kilemi insisted that the Sh8 billion was never requested through the proper channels, which led to the under-absorption.

“The State Department requested the transfer of Sh12 billion to the Hustler Fund, which was processed and transferred. However, no request was made for the remaining Ksh8 billion, hence the under-absorption,” he said.

Auditor General Nancy Gathungu’s report showed the department recorded a 36 per cent under-absorption rate, with the underfunding and under-expenditure affecting planned programmes.

Kilemi also disclosed the department expected Sh282 million from the Exchequer, but only received Sh3.6 million in appropriations-in-aid by the end of the financial year.

But MPs were unconvinced by the explanation. Committee chairperson Tindi Mwale told the PS he could not shift responsibility, saying it was his duty to follow through on the funding.

“You ought to have reviewed the documents and flagged the missing Sh8 billion allocated to the Hustler Fund. You cannot pass the buck by saying the officer failed to submit a request. Once the documentation reaches your office, it is you who signs off on it before it goes to the Treasury,” he said.

Funyula MP Wilberforce Oundo questioned whether an executive order had authorised the transfer of Hustler Fund responsibilities from the Cooperatives Department to the MSMEs Department.

“I’m just wondering – when was there an executive order that transferred the money from the State Department of Co-operatives to the State Department of SMEs or whatever it is called, the Hustler Fund?” he asked.

“Where is this money, so that we understand whether someone slept on the job or if the money was so saturated in the economy that Kenyans, so-called hustlers, could not absorb such a large amount?” Oundo posed.

Aldai MP Marianne Kitany criticised Kilemi for failing to protect a programme meant to support ordinary Kenyans.

“Chair, the PS has already admitted that he was holding the vote for this particular fund and acting on their behalf. If that is the case, then it was his responsibility to ensure that the fund received the necessary budgetary allocation,” she said.

Kilemi was given two weeks to provide documentation explaining the Sh8 billion shortfall in the Hustler Fund expenditure.