An audit by the Auditor-General has exposed a troubling financial anomaly across 15 Kenyan counties, where over 15,000 supplier payments worth a staggering KSh13.26 billion were abruptly canceled during the 2023/2024 financial year — despite prior approvals from the Controller of Budget (CoB) and the National Treasury.
The canceled payments, meant for legitimate suppliers and contractors, were voided without explanation, raising red flags over systemic financial mismanagement and the deliberate diversion of public funds at the county level.
The suspicious voids peaked in June 2024, the final month of the fiscal year. Leading the pack in both number and value of canceled transactions were Kisumu (KSh2.67 billion from 4,127 transactions), Kajiado (KSh2.28 billion), and Busia (KSh2.16 billion). Other counties flagged in the report include Nyandarua and Siaya, which also recorded significant payment reversals.
CoB Margaret Nyakang’o voiced deep concern over the trend, noting that many small-scale suppliers and contractors remain unpaid, even as county treasuries redirect funds to unapproved expenditures. “We are not notified when these payments are canceled after approval, and that lack of transparency is alarming,” she stated.
To address the growing opacity, the Controller of Budget and the Central Bank of Kenya (CBK) have developed a new oversight mechanism through the Integrated Financial Management Information System (IFMIS). The upgrade is designed to give both institutions real-time visibility into public transactions — from approval to disbursement — ensuring accountability in how counties spend public funds.
While the enhanced IFMIS platform was scheduled for rollout on April 22, 2025, the launch has been delayed as the National Treasury works to align implementation logistics. The delay further fuels concerns over whether county governments will continue exploiting oversight gaps.
The audit revelations have triggered calls from lawmakers, civil society, and supplier associations for stricter oversight, criminal investigations, and automatic sanctions for counties that flout financial regulations. Suppliers affected by the reversals are also threatening legal action over unpaid dues.
With public trust in devolved units at stake, the spotlight is now firmly on county executives and treasury officials — as questions mount over where the diverted billions went, and who benefited.
