Auditor-General exposes widespread waste, irregularities in government spending
A damning audit has revealed a wide pattern of stalled projects, missing records, and improper use of public money across several ministries and state agencies, with billions of shillings unaccounted for and critical programmes left incomplete.
The Auditor General’s latest report for the 2023/2024 financial year shows that 24 ministries and departments have failed to complete projects valued at Sh37.92 billion.
The report attributes this failure to poor financial oversight and inaction by accounting officers, even as public development plans continue to suffer.
The audit highlights a troubling trend where public officials have disregarded transparency requirements, with many failing to maintain proper records or follow legal procedures for public spending.
According to Auditor General Nancy Gathungu, a number of institutions submitted inaccurate financial statements, lacked supporting documentation, and revised their reports multiple times. Some even avoided cooperating with auditors.
“There are instances where some Accounting Officers are in breach of Section 62 of the Public Audit Act, 2015 by failing to adequately prepare for audit which is exhibited by inaccuracies in financial statements presented for audit, lack of requisite supporting documents, several revisions of financial statements and, in some cases, lack of cooperation with the auditors during the audit process,” she stated.
One of the major red flags in the report is the withdrawal of Sh23.6 billion by various ministries and departments under Article 223 of the Constitution.
This article allows emergency spending without prior approval, but the report shows that Sh10.2 billion of this was used in the previous financial year without going through the required processes.
Of the Sh10.2 billion, Sh4 billion was used in the maize flour subsidy initiative by the State Department for Crop Development, while Sh6.2 billion was spent by the National Treasury to purchase shares in Telkom Kenya.
Neither expenditures were approved nor budgeted for, contrary to legal provisions.
The report calls for amendments to the Public Finance Management Act, 2012, to create clear steps for when spending under Article 223 goes unapproved.
“The Public Finance Management Act, 2012 should therefore be amended to provide guidelines on the action to be taken where expenditure incurred under Article 223 is not approved by the National Assembly,” it reads.
The audit also examines confidential State House spending, where funds were transferred to a government agency for sensitive operations.
However, the report questions the lack of a defined system to track such transactions.
“The measures will strengthen governance, foster trust, and ensure funds are utilised responsibly without compromising State security,” it says.
In the security sector, irregularities were noted in a Sh5 billion insurance policy for officers from the National Police Service and the Kenya Prisons Service.
The scheme, which covered 141,961 officers for group life, personal accidents and work injuries between January and December 2023, was renewed for three extra months at a cost of Sh1.2 billion.
Yet, audit checks found inconsistencies in how the premiums were handled. “However, a review of insurance records revealed anomalies in various premiums,” the report adds.
The State Department for Internal Security and National Administration had eight development projects valued at Sh1.15 billion, most of which have stalled after spending Sh833.65 million.
Similarly, in Parliament, the Parliamentary Joint Services spent Sh934.5 million on a Sh4.3 billion project meant to complete the Centre for Parliamentary Studies and Training, which also remains incomplete.
At the Ministry of Defence, infrastructure upgrades and other modernisation works valued at Sh21.9 billion have also stalled, with only Sh3.2 billion disbursed by June 2024.
The education sector has come under serious scrutiny after a special audit revealed billions were released for learners and schools that do not exist.
From 2020 to 2024, the government disbursed Sh28.59 million to 33 non-existent schools out of a sample of 83.
Additionally, over 700 schools in a larger sample had inflated student numbers in the National Education Management Information System (NEMIS), resulting in excess funding of Sh3.7 billion.
Sh3.5 billion went to secondary schools, Sh30.8 million to junior secondary schools, and Sh79.4 million to primary institutions.
“The special audit concluded that the current allocation per learner, based on the funding model, does not factor in the varying needs and circumstances of the learners and schools. The capitation model, therefore, is not equitable,” it states.
In the medical sector, Gathungu’s report found that the Sh104.8 billion Social Health Authority (SHA) system was acquired through a process that failed to meet legal standards. The system's ownership, according to the report, remains with the vendor consortium, leaving the government with limited control.
“Ownership of the system, system components and all intellectual property rights shall remain in the ownership of the consortium except for the infrastructure, which is to be transferred to the procurement,” the report reads.
The construction of sports stadiums has also hit a dead end, with six key stadiums, Kamariny, Kipchoge Keino, Karatu, Wote, Ruringu, and Kirubia, stalled despite Sh6.17 billion being earmarked for them.
“The statement of financial position and Note 27 to the financial statements reflect a work in progress balance of Sh6,171,122,694. Review of projects implemented by Management revealed the following unsatisfactory matters,” the report adds.
In agriculture, the State Department for Water and Sanitation spent Sh96.95 million to drill boreholes, but several either stalled or turned out to be dry.
Sh49.7 million was used on incomplete drilling, while Sh47.2 million went to boreholes that failed to produce water.
The audit further reveals that Sh44.8 billion collected via the e-Citizen digital payments system remains unaccounted for by the Immigration Department. The department also failed to provide audit records for 21 accounts holding a combined Sh7.1 billion in both Kenyan and foreign currency.
“Despite the strategic importance of e-Citizen, the audit of e-Citizen revenue accountability statements for the year ended June 30, 2024, revealed the following anomalies,” the report notes.
On affordable housing, the report shows that Sh49.46 billion worth of contracts were signed for projects across the country, yet the audit team could not confirm land ownership at the project sites due to missing documents.
The Auditor General’s latest report for the 2023/2024 financial year shows that 24 ministries and departments have failed to complete projects valued at Sh37.92 billion.
The report attributes this failure to poor financial oversight and inaction by accounting officers, even as public development plans continue to suffer.
The audit highlights a troubling trend where public officials have disregarded transparency requirements, with many failing to maintain proper records or follow legal procedures for public spending.
According to Auditor General Nancy Gathungu, a number of institutions submitted inaccurate financial statements, lacked supporting documentation, and revised their reports multiple times. Some even avoided cooperating with auditors.
“There are instances where some Accounting Officers are in breach of Section 62 of the Public Audit Act, 2015 by failing to adequately prepare for audit which is exhibited by inaccuracies in financial statements presented for audit, lack of requisite supporting documents, several revisions of financial statements and, in some cases, lack of cooperation with the auditors during the audit process,” she stated.
One of the major red flags in the report is the withdrawal of Sh23.6 billion by various ministries and departments under Article 223 of the Constitution.
This article allows emergency spending without prior approval, but the report shows that Sh10.2 billion of this was used in the previous financial year without going through the required processes.
Of the Sh10.2 billion, Sh4 billion was used in the maize flour subsidy initiative by the State Department for Crop Development, while Sh6.2 billion was spent by the National Treasury to purchase shares in Telkom Kenya.
Neither expenditures were approved nor budgeted for, contrary to legal provisions.
The report calls for amendments to the Public Finance Management Act, 2012, to create clear steps for when spending under Article 223 goes unapproved.
“The Public Finance Management Act, 2012 should therefore be amended to provide guidelines on the action to be taken where expenditure incurred under Article 223 is not approved by the National Assembly,” it reads.
The audit also examines confidential State House spending, where funds were transferred to a government agency for sensitive operations.
However, the report questions the lack of a defined system to track such transactions.
“The measures will strengthen governance, foster trust, and ensure funds are utilised responsibly without compromising State security,” it says.
In the security sector, irregularities were noted in a Sh5 billion insurance policy for officers from the National Police Service and the Kenya Prisons Service.
The scheme, which covered 141,961 officers for group life, personal accidents and work injuries between January and December 2023, was renewed for three extra months at a cost of Sh1.2 billion.
Yet, audit checks found inconsistencies in how the premiums were handled. “However, a review of insurance records revealed anomalies in various premiums,” the report adds.
The State Department for Internal Security and National Administration had eight development projects valued at Sh1.15 billion, most of which have stalled after spending Sh833.65 million.
Similarly, in Parliament, the Parliamentary Joint Services spent Sh934.5 million on a Sh4.3 billion project meant to complete the Centre for Parliamentary Studies and Training, which also remains incomplete.
At the Ministry of Defence, infrastructure upgrades and other modernisation works valued at Sh21.9 billion have also stalled, with only Sh3.2 billion disbursed by June 2024.
The education sector has come under serious scrutiny after a special audit revealed billions were released for learners and schools that do not exist.
From 2020 to 2024, the government disbursed Sh28.59 million to 33 non-existent schools out of a sample of 83.
Additionally, over 700 schools in a larger sample had inflated student numbers in the National Education Management Information System (NEMIS), resulting in excess funding of Sh3.7 billion.
Sh3.5 billion went to secondary schools, Sh30.8 million to junior secondary schools, and Sh79.4 million to primary institutions.
“The special audit concluded that the current allocation per learner, based on the funding model, does not factor in the varying needs and circumstances of the learners and schools. The capitation model, therefore, is not equitable,” it states.
In the medical sector, Gathungu’s report found that the Sh104.8 billion Social Health Authority (SHA) system was acquired through a process that failed to meet legal standards. The system's ownership, according to the report, remains with the vendor consortium, leaving the government with limited control.
“Ownership of the system, system components and all intellectual property rights shall remain in the ownership of the consortium except for the infrastructure, which is to be transferred to the procurement,” the report reads.
The construction of sports stadiums has also hit a dead end, with six key stadiums, Kamariny, Kipchoge Keino, Karatu, Wote, Ruringu, and Kirubia, stalled despite Sh6.17 billion being earmarked for them.
“The statement of financial position and Note 27 to the financial statements reflect a work in progress balance of Sh6,171,122,694. Review of projects implemented by Management revealed the following unsatisfactory matters,” the report adds.
In agriculture, the State Department for Water and Sanitation spent Sh96.95 million to drill boreholes, but several either stalled or turned out to be dry.
Sh49.7 million was used on incomplete drilling, while Sh47.2 million went to boreholes that failed to produce water.
The audit further reveals that Sh44.8 billion collected via the e-Citizen digital payments system remains unaccounted for by the Immigration Department. The department also failed to provide audit records for 21 accounts holding a combined Sh7.1 billion in both Kenyan and foreign currency.
“Despite the strategic importance of e-Citizen, the audit of e-Citizen revenue accountability statements for the year ended June 30, 2024, revealed the following anomalies,” the report notes.
On affordable housing, the report shows that Sh49.46 billion worth of contracts were signed for projects across the country, yet the audit team could not confirm land ownership at the project sites due to missing documents.
Auditor General Nancy Gathungu
Government spending
Auditor General corruption
Auditor General abuse of office
Auditor General's report
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