Revealed: How governors are pilfering counties’ billions

By Newsflash Reporter

A new audit has exposed how county governors are rerouting billions of shillings allocated for verified suppliers, cancelling thousands of approved payments after withdrawing the funds from official county accounts.

According to the Auditor-General’s report for the financial year ending June 2024, 15 counties cancelled 15,008 transactions worth Sh13.26 billion.

Most of the cancellations occurred in June, coinciding with the close of the fiscal year. The report notes that while these payments had been approved by both the National Treasury and the Controller of Budget (COB) for legitimate contractors and suppliers, they were ultimately not honoured.

The report further reveals that the Controller of Budget, Margaret Nyakang’o, was not informed about the cancellations. Kisumu topped the list with 4,127 transactions valued at Sh2.67 billion nullified, followed by Kajiado (1,922 transactions worth Sh2.28 billion), and Busia (Sh2.16 billion in voided payments).

The Auditor-General flagged Kajiado County for failing to disclose the voided payments as pending bills or explaining how the redirected funds were used. “The funding may have been utilised to finance transactions not approved by the COB,” the audit stated.

Nyakang’o confirmed that counties often switch payments to unverified suppliers after receiving funds approved for vetted ones. “Many of the pending bills are from suppliers who had been cleared for payment, but once the money is released, counties opt to pay different, unapproved suppliers,” she said.

The COB’s office lacks oversight on whether approved payments are eventually honoured, as it has no access to real-time transaction updates once counties withdraw funds from the County Revenue Fund (CRF). “I only find out when suppliers complain that their approved payments were never made,” Nyakang’o noted.

Audit raises red flags on financial accountability in counties

Governors, as the accounting officers in counties, are responsible for all financial decisions. In Busia, the audit revealed that over a third of the cancelled Sh2.16 billion transactions occurred in June 2024 alone, without any explanation offered.

Counties with the highest number of cancelled transactions were Kisumu (4,127), Nyandarua (3,125), Kajiado (1,922), and Siaya (1,500), collectively accounting for 71 percent of all voided transactions. In terms of value, Kisumu again led, followed by Kajiado, Busia, and Bomet (Sh1.28 billion), representing 63.3 percent of the total cancelled payments.

Efforts to get comments from 11 governors yielded minimal response, with only Embu Governor Cecily Mbarire responding. She confirmed her county voided 716 transactions worth Sh324.5 million after Treasury delayed the disbursement of Sh454 million, which arrived in July 2024—after the end of the fiscal year. The payments were later formalised through a supplementary budget.

Read more:The Wamatangi arrest puzzle

Treasury Principal Secretary Chris Kiptoo described the cancellations as a “normal end-of-year procedure,” explaining that they often happen when payments processed in IFMIS aren’t completed before the financial year ends.

In response to the issue, the Central Bank of Kenya and the COB have developed a new platform to improve transparency in public financial management. The system will give COB and CBK visibility into IFMIS transactions to prevent unauthorized payments. It was scheduled to launch on April 22, 2025, but Treasury has delayed its rollout, citing system unpreparedness.

Nyakang’o emphasized that once implemented, the platform will block public entities from uploading unplanned payments, ensuring that only vetted suppliers are paid. However, until full transparency is achieved, questions remain about how counties spent the billions meant for verified suppliers.