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Post Reply: Audit Uncovers Ksh127 Million Diverted to Private Firms from eCitizen Platform

<blockquote><div class="quotetitle">Quote from <a class="profile-link highlight-moderator" href="https://lawguide.co.ke/understanding-law/legal-forum/profile/lawyer/">Lawyer</a> on August 6, 2025, 6:03 am</div><div id="pl-7385"  class="panel-layout" ><div id="pg-7385-0"  class="panel-grid panel-no-style" ><div id="pgc-7385-0-0"  class="panel-grid-cell"  data-weight="1" ><div id="panel-7385-0-0-0" class="so-panel widget widget_sow-editor panel-first-child panel-last-child" data-index="0" data-style="{&quot;background_image_attachment&quot;:false,&quot;background_display&quot;:&quot;tile&quot;,&quot;background_image_size&quot;:&quot;full&quot;,&quot;background_image_opacity&quot;:&quot;100&quot;,&quot;border_thickness&quot;:&quot;1px&quot;}" ><div
			
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	<p dir="ltr" data-pm-slice="1 1 []">A recent audit by the Office of the Auditor General has revealed significant financial irregularities in Kenya's eCitizen platform, a digital payment system designed to streamline access to government services. The report highlights four unauthorized transactions totaling Ksh127.85 million, which were diverted from the official eCitizen Paybill account to private entities on January 25, 2024. This revelation has sparked widespread concern about transparency, accountability, and oversight in the management of public funds within the digital payment system.</p>
<p dir="ltr">The eCitizen platform, launched to facilitate payments for services such as passports, business registrations, driver's licenses, and police clearance certificates, relies on Paybill 222222 to collect funds, which are meant to be transferred directly to the Kenya Commercial Bank (KCB) Settlement Account. However, the audit found that these funds were instead redirected to private firms without any supporting documentation or approvals, raising red flags about potential mismanagement or embezzlement.</p>
<p dir="ltr">According to the findings, the lack of documentation for these transactions violates Article 201 of the Kenyan Constitution, which mandates prudent and responsible use of public funds. The Auditor General emphasized that such actions expose the government to potential legal disputes, as payments were made to entities not included in the official contract for the development and maintenance of the eCitizen platform. This breach undermines public trust in a system intended to enhance efficiency and accessibility in government services.</p>
<p dir="ltr">The audit also uncovered additional irregularities in the eCitizen platform's financial operations. A total of Ksh429 million was paid to companies without signed contracts, further highlighting systemic weaknesses in oversight and accountability. The report pointed to inconsistencies in reporting formats and standards across various ministries, departments, and agencies (MDAs), which has led to incomplete record-keeping and unrecorded collections. For instance, the Ministry of Lands reported a shortfall of over Ksh138 million, with Ksh7.237 billion collected through eCitizen but only Ksh7.1 billion accounted for by the end of the financial year.</p>
<p dir="ltr">Another critical issue raised in the audit is the government's heavy reliance on third-party vendors for the operation and maintenance of the eCitizen platform. This dependency has resulted in a lack of full control over the system, exposing it to risks such as revenue leakages, security vulnerabilities, and potential system downtime. The Auditor General noted that the absence of robust IT controls compromises the integrity of the data processed through the platform, further exacerbating the risk of financial mismanagement.</p>
<p dir="ltr">The report also flagged unauthorized charges imposed on users of the eCitizen platform. Prior to January 23, 2023, the National Treasury enforced a flat fee of Ksh50 or $1 per transaction, despite a 2014 Gazette Notice requiring a prorated fee structure. This led to an overcharge of Ksh1.807 billion and $3.33 million from the public. Even after a new Gazette Notice was issued in December 2023, the Treasury continued to overcharge users, resulting in additional irregular collections of Ksh319 million through the new payment gateway and Ksh30.7 million via the previous one.</p>
<p dir="ltr">The findings have prompted calls for immediate action to address the vulnerabilities in the eCitizen platform. The Auditor General has recommended strengthening oversight mechanisms, improving IT controls, and ensuring that all transactions are properly documented and approved. The report also urges the government to reduce its reliance on external vendors and establish greater control over the platform to safeguard public funds.</p>
<p dir="ltr">Public reaction to the audit has been one of outrage, with many Kenyans expressing frustration over the apparent mismanagement of a platform intended to modernize and simplify access to government services. The eCitizen platform, celebrated as a flagship initiative of digital governance, now faces scrutiny as questions mount about who is benefiting from these irregular transactions and why such lapses have gone unaddressed for so long.</p>
<p dir="ltr">The audit's revelations come at a time when the government is under pressure to enhance transparency and accountability in public finance management. Lawmakers have already initiated investigations into the platform, with the Public Accounts Committee demanding answers from key officials, including Treasury Principal Secretary Chris Kiptoo. The committee has expressed concern over the lack of clarity regarding the destination of funds collected through eCitizen and the absence of proper reporting mechanisms.</p>
<p dir="ltr">As the government grapples with these findings, the Auditor General's report serves as a stark reminder of the need for robust systems to protect public resources. The eCitizen platform, while a critical tool for digital transformation, must be managed with the highest standards of integrity to maintain public confidence and ensure that funds collected are used for their intended purpose. The next steps taken by the government will be crucial in addressing these irregularities and restoring trust in the digital payment system.</p>
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