The Kenyan government is facing serious allegations following revelations from the Auditor General’s report for the year ending June 2024, which states irregularities involving Sh2.3 billion meant for African Union (AU) and other international bodies’ subscription fees. This has raised eyebrows about accountability and has put Kenya’s fiscal management under the microscope.
According to Auditor General Nancy Gathungu's findings, the government improperly transferred these funds from the African Union and Other International Organisations Subscription Fund, contravening strict financial regulations established to govern its use. The key point highlighted is the absence of documentation justifying the payment, which raises significant concerns around the legitimacy of the transaction.
Gathungu noted, “The statement of receipts and payments reflects surplus transfer to the Exchequer of Sh2.3 billion as disclosed,” but emphasized, “documentation to support approval of the payment was not provided for audit.” This lack of supporting documents calls the accuracy and lawfulness of the payment transactions significantly to question.
Established under the Public Finance Management (PFM) regulations ratified back in 2017, the African Union and Other International Organisations Subscription Fund was set up to centralize and manage payments associated with Kenya's international obligations. This new structure was intended to prevent the previous model's complications, where different ministries, departments, and agencies managed their subscription fees separately.
Despite this shift, Gathungu pointed out the government’s failure to repeal older laws necessitating individual agencies to remit funds separately, which risks duplicate payments. “Regulation six requires all receipts, savings, balance, and accruals of the Fund at the close of each financial year to remain with the Fund for its intended purpose,” she said.
Notably, Kenya’s engagement with international and regional organizations continues to grow. The country is associated with several bodies, such as the Common Market for Eastern and Southern Africa (COMESA), AU, and the East African Community (EAC), all of which necessitate annual subscription payments. This year's payments have surged, amounting to Sh7.75 billion, up from Sh4.9 billion from the previous year. AU and EAC Secretariat received the largest portion of funds - Sh1.22 billion and Sh1.26 billion, respectively.
Additional allocations reported include Sh539 million sent to the Intergovernmental Authority on Development (IGAD) and Sh289 million to the Global Fund. Despite the government setting aside Sh834 million to the Principal Secretary for Foreign and Diaspora Affairs for international subscription management, the centralization effort through the National Treasury must adhere strictly to legal frameworks to eliminate financial misappropriation.
One recent official receipt dated January 15, 2025, confirmed Kenya remitted $7.5 million (Sh970.1 million) as its regular contribution to the AU. This payment was well within the expected financial liabilities, yet the broader question remains unanswered: how could Sh2.3 billion have been redirected from such necessary funding?
The lack of rigorous auditing and accountability measures raises alarming questions about the country’s public finances and dedication to international commitments. Both government oversight and public scrutiny now play pivotal roles as citizens demand transparency and accountability not only for past mismanagement but also for future engagements.
Therefore, as discussions around governance and budget allocations heat up, this situation becomes even more important for stakeholders, enabling them to push for reform and stricter adherence to financial regulations. Parliamentary oversight may need to increase its role to prevent similar situations from arising again, ensuring public funds are not just numbers on reports but reflect responsible and ethical financial governance.
The Auditor General’s findings echo the necessity to establish stringent safeguards to manage public funds diligently. Without such measures, the potential for continued misallocation of resources could undermine Kenya’s commitments to international organizations and jeopardize its reputation globally.
There is urgency for the government to address these issues not as isolated incidents but as part of broader governance failures. Each finding underscored by the Auditor General must resonate through the corridors of power, igniting conversations about professional management of public finances and the ethical obligations of those entrusted with these responsibilities.
This incident highlights both the challenges and the attention needed within Kenya’s public finance machinery as it grapples with legality and the ethical deployment of taxpayer money. It serves as both a warning and guide for necessary reforms moving forward.