The Treasury has issued a 41-day deadline to all principal secretaries, directing them to account for petty cash issued to officials in their ministries and departments during the financial year that ended on June 30, 2025.

This move is part of a renewed effort to curb the misuse of public funds and improve transparency across government operations.

In a letter signed by Principal Secretary Chris Kiptoo and addressed to all PSs, the Treasury has ordered the submission of complete and consolidated audit reports on imprest, along with supporting documents, by August 14.

 The directive follows instructions from the Head of Public Service, Felix Koskei, targeting long-standing loopholes in the handling of petty cash.

“All internal audit functions across public entities are hereby directed to undertake a thorough and comprehensive audit of all issued imprests, placing particular emphasis on compliance, accountability, and value for money,” Kiptoo stated in the letter, which was also copied to Koskei and Treasury Cabinet Secretary John Mbadi.“The findings of this exercise must be formally submitted to the Office of the Chief of Staff and Head of Public Service,” he added.

Imprest, often referred to as petty cash, is widely viewed as a channel through which public officials divert funds meant for official use to private ends.

Despite clear regulations under the Public Finance Management law, which require surrender of imprest within seven working days after an official trip, compliance has been inconsistent, leading to repeated audit queries and concerns over accountability.

By design, the imprest system is meant to operate as a self-regulating mechanism, allowing public offices to maintain a steady balance by regularly replenishing money spent on small, routine operational expenses. However, the failure to account for these funds continues to raise red flags within the government’s financial management systems.

The latest directive is being seen as part of broader reforms, including the recent rollout of the electronic government procurement system (e-GP), aimed at sealing corruption loopholes that drain nearly a third of the national budget annually.

As part of the requirements outlined in Kiptoo’s letter, chief executive officers of State corporations and semi-autonomous government agencies must compile and forward a summary of their audit findings and a signed copy of the final audit report.

These are to be sent to the heads of internal audit units in their respective departments through the PSs by August 8.

The intensified scrutiny of imprest use is expected to put pressure on accounting officers across ministries and agencies to strengthen internal controls and demonstrate proper use of public funds, as the government tightens its grip on financial discipline.