Auditor-General Nancy Gathungu Reports Over 1 Trillion Shillings in Loans and Bonds Not Exclusively Used for Development

In a startling revelation, Auditor-General Nancy Gathungu has reported that over 1 trillion shillings in loans and bonds acquired by the government were not exclusively used for development purposes. This disclosure has raised concerns about the management and utilization of public funds in Kenya.

The Auditor-General’s report, which covers the financial year ending June 2023, highlights significant discrepancies in the allocation and usage of loans and bonds that were ostensibly intended for development projects. According to the report, a substantial portion of these funds was diverted to recurrent expenditures, which include salaries, administrative costs, and other non-developmental expenses.

Nancy Gathungu emphasized that the misallocation of these funds undermines the country’s development goals and compromises the effectiveness of government projects. The report pointed out that while loans and bonds are crucial for financing large-scale infrastructure projects and other developmental initiatives, their diversion to recurrent expenditures poses a serious threat to the country’s economic stability and growth.

“The findings of this audit are deeply concerning. The misuse of funds meant for development projects not only delays the completion of these projects but also increases the burden on taxpayers who ultimately bear the cost of repaying these loans,” Gathungu stated.

The report also highlighted several specific instances where funds were misallocated. For example, large sums intended for infrastructure projects were instead used to cover budget deficits and other recurrent costs. This mismanagement has led to delays in project completion, increased costs, and in some cases, complete abandonment of crucial infrastructure projects.

The Auditor-General called for immediate action to rectify these issues. She urged the government to establish stricter oversight mechanisms to ensure that funds allocated for development projects are used exclusively for their intended purposes. Gathungu also recommended enhancing transparency and accountability in the management of public funds to restore public trust and confidence in the government’s financial practices.

The revelations have sparked a public outcry, with citizens and civil society organizations demanding accountability from the government. Many are calling for thorough investigations to identify and hold accountable those responsible for the misallocation of funds.

In response to the report, several government officials have pledged to address the issues raised by the Auditor-General. Treasury officials have promised to implement more stringent monitoring and evaluation processes to ensure that funds are used appropriately. Additionally, there have been calls for legislative reforms to enhance the Auditor-General’s powers to enforce accountability and transparency in public finance management.

The opposition and various watchdog organizations have also weighed in, calling for a parliamentary inquiry into the matter. They argue that comprehensive investigations are necessary to uncover the full extent of the misuse and to develop long-term solutions to prevent future occurrences.

As Kenya grapples with significant development challenges, the efficient and transparent use of public funds is paramount. The Auditor-General’s report serves as a wake-up call for the government to take immediate and decisive action to safeguard public resources and ensure that they are used to promote the country’s development objectives.