Auditor General queries use of taxpayer funds in donor projects

Auditor General Nancy Gathungu. [Samson Wire. Standard].

Auditor General Nancy Gathungu has flagged the use of taxpayer money in several donor-funded projects, casting doubt on the effectiveness of ongoing key development programmes.      

In the latest audit report on the expenditures of the national government, Gathungu reveals the National Treasury has failed to explain tens of millions of shillings in discrepancies between funds disbursed and those listed in financial statements.

The grants in question include the Global Fund’s programme to accelerate the reduction of TB, leprosy and lung disease where the government had pledged Sh600 million in counterpart funding.     

“The statement of receipts and payments reflects receipts from Government of Kenya (Counterpart Funding) of Sh387.4 million,” says the report.

“However, the amount differs from the amount indicated in the ledger of Sh479.6 million by an unexplained variance of Sh92.2 million.

The National Treasury further reports disbursing another Sh250 million in counterpart funding for the financial year ended June 30, 2020 bringing the cumulative amount to Sh637.4 million. However, Gathungu said Treasury has not supported the expenditure to show how the balance has been built up since the programme’s inception.

“In absence of any reconciliation and explanation, the accuracy and completeness of the reported cumulative receipts from Government of Kenya and other grants and transfer payments balance of Sh637.4 million for the year ended June 30, 2021 could not be confirmed,” she said.

In January 2020, Kenya received approval of a Sh41.5 billion grant from the Global Fund to help fight tuberculosis, HIV-Aids and malaria for the period 2020-22.

Kenya has been both a donor and implementing partner to the Global Fund since inception and has to date contributed more than Sh700 million to the global kitty.

In the 2020-22 funding cycle, Kenya pledged to donate Sh600 million, the highest since 2001. 

However, the audit report indicates that the programme expended Sh511.7 million against an approved budget of Sh701 million, resulting to an under-expenditure of 27 per cent.

“The underfunding and underperformance affected the planned activities and may have impacted negatively on service delivery to the public,” Ms Gathungu said.

Also in question is a public finance management reforms programme funded by the Danish development agency, Danida, and the World Bank.

 Treasury indicates the entire project budget stood at Sh1 billion but actual receipts stood at Sh446 million, resulting to a shortfall of Sh600 million.

The project had further budgeted Sh1 billion in expenditure but managed to absorb Sh881 million resulting to an under-absorption of Sh134.9 million.