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Auditor General Exposes Procurement Violations Across 32 Kenyan Counties

A comprehensive audit report for the 2023/2024 financial year has revealed widespread procurement irregularities across 32 Kenyan counties, totaling over Sh10 billion. The findings, detailed by Auditor General Nancy Gathungu, highlight systemic failures in adhering to procurement regulations, undermining transparency, fairness, and inclusivity in public spending.

The audit uncovered multiple violations of the Public Procurement and Asset Disposal Act, 2015, and its associated regulations. Among the most significant issues were:

  • Non-Compliance with Procurement Regulations: Many counties failed to verify supplier qualifications before awarding contracts, as mandated by the Public Procurement and Asset Disposal Regulations, 2020. This lapse risks engaging unqualified suppliers and compromises the integrity of public spending.

  • Late or Missing Procurement Plans: Numerous counties either submitted their procurement plans late or failed to submit them entirely, violating Regulation 8 of the Public Procurement and Asset Disposal Regulations. This lack of planning disrupts proper budgeting and oversight.

  • Misuse of Direct Procurement Methods: Several counties bypassed the open tender process required under Section 91 of the Act, opting for direct procurement methods without justification. This practice limits competition and transparency.

  • Exceeding Budget Limits: Some counties procured goods and services beyond approved budgets without securing supplementary budget approval, breaching Section 67 (1) of the Public Finance Management (County Governments) Regulations.

  • Unauthorized High-Value Procurements: Counties engaged in high-value procurements without obtaining necessary clearance from the Public Procurement Regulatory Authority, violating Section 66 (3) of the Act.

  • Lack of Transparency in Advertising: Certain counties failed to publicly advertise procurement opportunities, contravening Section 63 (1), which mandates transparency and fair competition.

  • Overuse of Request for Quotation: The audit flagged the use of Request for Quotation for purchases exceeding the Sh3 million threshold, which requires open tendering under Section 45 (3) (b).

The total value of procurement irregularities amounted to Sh10,094,695,416. Nairobi City County recorded the highest irregularities at Sh3.3 billion, followed by Kericho County with Sh1.9 billion. Other counties with significant violations include:

  • Kakamega: Sh531.5 million

  • Nyandarua: Sh445.2 million

  • Kisii: Sh364.1 million

  • Machakos: Sh292.4 million

These figures reflect a broad pattern of financial mismanagement across the affected counties.

The audit also highlighted deficiencies in promoting inclusivity. Many counties failed to allocate at least 30 percent of procurement contracts to youth, women, and persons with disabilities, as required by Section 157 (2) of the Act. This shortfall undermines efforts to ensure equitable access to economic opportunities.

The report identified Sh1.4 billion in avoidable expenses across 17 counties, including settlements for court cases triggered by county actions and interest penalties due to delayed contract payments. Notable examples include:

  • Narok: Sh756.1 million

  • Kisii: Sh88.4 million

  • Kajiado: Sh79.1 million

  • Mombasa: Sh69.8 million

Additionally, 23 counties made irregular contributions totaling Sh79.8 million to the Council of Governors, violating Section 37 of the Intergovernmental Relations Act. Such contributions are meant to be covered by the national government budget, not county funds.

The audit underscores significant gaps in accountability and compliance within county procurement processes. The failure to adhere to legal frameworks not only risks financial losses but also erodes public trust in governance. The Auditor General’s report calls for urgent reforms to strengthen oversight, enforce compliance with procurement laws, and enhance transparency in public spending. Specific recommendations include:

  • Ensuring timely submission of procurement plans.

  • Strict adherence to open tendering processes.

  • Verifying supplier qualifications before contract awards.

  • Improving inclusivity in contract allocations.

  • Establishing robust internal controls to prevent unauthorized spending.

The findings of the Auditor General’s report paint a concerning picture of procurement practices in Kenya’s counties. With over Sh10 billion in irregularities, the need for systemic reforms is evident. Addressing these issues will be critical to safeguarding public funds and promoting fair, transparent, and inclusive procurement processes across the nation.