Auditor-General Nancy Gathungu has raised serious concerns over the handling of Sh2.5 billion allocated to donor-funded projects, noting that much of the money was spent without proper records or accountability.

In her 2023/24 financial year report tabled in Parliament, she revealed that payments were made in the absence of work plans, contracts, invoices, or delivery confirmations, violating public finance rules.

The report cites regulation 104 (1) of the Public Finance Management (National Government) Regulations, 2015, which requires accounting officers to ensure proper use of public funds and maintain complete records of all transactions.

“Such expenditure not only compromises the reliability of financial statements, but also exposes the donor-funded projects to the risk of misappropriation of funds,” the report reads.

In the Bogoria-Silali geothermal project, fuel worth Sh980,911,677 was delivered without any supporting records.

Likewise, the Rural Electrification and Renewable Energy Corporation carried out projects totaling Sh75,231,232 but could not provide documentation to confirm the work.

The audit also notes missing Exchequer and receipt vouchers of Sh127,483,464 in the Mombasa-Mariakani highway project funded by the African Development Fund (ADF).

Sh31,337,520 spent on fuel and consultancy for the Horn of Africa groundwater resilience project lacked supporting evidence.

For locally-led climate action projects, transfers totaling Sh228,427,672 to counties had no breakdown of individual project costs. Travel expenses worth Sh1,672,770 under the affordable housing program were undocumented, while the Eastern electricity highway project, financed by ADF and IDA, partially disclosed Sh324,606,257 owed to a contractor. Sh18,398,447 intended for the Lake Nakuru Biodiversity Conservation project was used for unrelated purposes.

The audit found that a contractor on the Lake Victoria Water and Sanitation programme was overpaid Sh17,849,476, with no evidence of recovery.

Staff at Jaramogi Oginga Odinga University of Science and Technology received Sh23,670,676 in allowances under the USAID Boresha Jamii project, but the basis for the rates was not documented.

“The project paid house and other allowances to staff amounting to Sh23,670,676. However, the basis of the rates used to pay the allowances was not provided for audit,” the report states.

Expenditure returns worth Sh26,614,605 for the Covid-19 health emergency response were not submitted by the State Department for Medical Services.

The report also flags Sh176,280 listed as compensation under the Global Fund malaria project without supporting evidence.

On rural roads and market infrastructure projects, travel reimbursements of Sh35,005,463 were undocumented.

Additionally, Sh575,842,147 withdrawn from the Global Fund for HIV programs under Vision 2030 had no supporting documentation.

The report also questions Sh15 million for the Sirari Corridor road safety project, which was spent on land within road reserves instead of compensating affected persons as required.

Transport costs of Sh2,817,000 under the Global Fund tuberculosis grant were also paid without records, highlighting widespread gaps in financial management and oversight.