NAIROBI, Kenya — A new audit report by Auditor General Nancy Gathungu has exposed widespread financial mismanagement at the Kenya Forest Service (KFS), with bloated staff costs, unaccounted revenue, and unresolved legal liabilities raising alarm over governance failures and possible misuse of public funds.
Covering the financial year ending June 30, 2024, the audit reveals that KFS’s wage bill stood at Sh5.69 billion — a staggering 61 per cent of its total revenue of Sh9.34 billion.
This far exceeds the 35 per cent limit set by Regulation 26 of the Public Finance Management Act, 2015.
“This was contrary to the public finance management law,” Gathungu stated in the report, warning that such expenditure threatens to cripple KFS’s core operations, including forest conservation and community programmes.
Overpaid and Understaffed
Despite the inflated salary burden, the agency is grappling with a 20 per cent staff shortage, operating with 1,647 fewer employees than its authorized strength.
The audit points to poor workforce planning, with some departments understaffed while others are overstaffed.
“The staff were unevenly placed,” said Gathungu. “Some departments had more staff than required, while critical areas remained understaffed.”
Millions Unaccounted For
The audit also flagged unaccounted revenue totalling Sh209 million collected through point-of-sale devices not linked to KFS’s official financial systems.
This has raised concerns about the accuracy and integrity of the reported collections.
“The completeness of the revenue amounting to Sh209 million couldn’t be confirmed,” the report notes.
Additional financial irregularities include:
- Unaccounted imprests amounting to Sh82.7 million
- Doubtful receivables worth Sh371.8 million, lacking supporting documentation
- Unremitted taxes of Sh1.7 billion, exposing KFS to possible penalties from the Kenya Revenue Authority
- Unrefunded Sh12 million in licence fees for a stalled sewer project in Ngong Forest, neither refunded nor disclosed as a liability
Weak Controls and Legal Risks
KFS’s internal controls were also criticised as inadequate. The agency failed to fully roll out a new financial management system, integrating only 10 out of 36 planned forest stations, leading to reconciliation delays and poor cash management.
On the legal front, the audit reveals 179 unresolved cases — some dating as far back as 2008 — including land disputes and compensation claims.
Notably, the agency lost Sh8.18 million in cases where it failed to defend itself in court.
“The regularity and value for money of the amount incurred could not be confirmed,” the auditor noted.
Furthermore, legal fees paid to external counsel were not approved by the Attorney General as required.
Among other governance lapses, the audit found:
- Reinstatement of 13 staff after wrongful dismissals, while three other cases remain in court
- Persistent failure to act on previous audit recommendations
- Delays in resolving outstanding financial and operational issues
The Auditor General has urged the agency’s management to take immediate corrective measures to address the systemic failures and enhance transparency in the handling of public resources.
