NAIROBI, Kenya – Kenya’s Contingencies Fund, set aside to cushion the country during emergencies, has been put under scrutiny after the Auditor General exposed widespread irregularities and weak oversight in its use.
A new audit for the year ending June 30, 2024 shows billions of shillings were withdrawn from the fund without adequate justification, while several ministries failed to account for the amounts they received.
Auditor General Nancy Gathungu issued a qualified opinion on the fund’s financial statements, pointing to unsupported expenditures, misuse of resources and breaches of the Public Finance Management Act.
Top among the concerns is Sh1.07 billion in refunds that could not be verified. The Ministries of Defence, Internal Security and National Administration, and Irrigation did not submit expenditure returns for the amounts they received, making it impossible to track how the money was spent.
“In the circumstances, the validity of the amount disbursed from the fund of Sh1,070,000,000 could not be confirmed,” the report states.
Another irregularity flagged was Sh130 million used by the State Departments for Public Works, Crop Development and Livestock.
According to the audit, the funds were spent on goods and services that did not meet the legal threshold for emergency spending.
The biggest red flag involved Sh3.83 billion advanced to the State Department for Arid and Semi-Arid Lands and Regional Development between December 2023 and June 2024.
Gathungu said the activities funded had already been budgeted for in the approved supplementary estimates, raising questions on why the emergency fund was tapped.
“No explanation was provided to justify the funding of the expenditure from the fund, yet the department had included the activities in the approved supplementary budget,” the Auditor General noted.
The Contingencies Fund, established under Article 208 of the Constitution, is managed by the National Treasury with a permanent capital ceiling of Sh10 billion. It is meant to address urgent and unforeseen needs not covered in the budget.
In the 2023/24 financial year, Sh6.53 billion was withdrawn from the fund—more than double the Sh3.11 billion spent the previous year—largely for drought and flood mitigation measures, including the El Niño response.
The revelations come at a time when the Treasury is grappling with falling revenues and ballooning pending bills, which stood at Sh526 billion by June 2025.
While Treasury reported a budget absorption rate of nearly 80 per cent during the year, the audit highlights gaps in accountability and the urgent need for tighter controls over emergency spending.
