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Auditor-General's report raises red flag over CDF misuse

Sunday February 24 2019

Auditor-General Edward Ouko

Auditor-General Edward Ouko briefs the media during a workshop in Nairobi on the development of the Office of the Auditor-General Citizen Engagement Framework, February 13, 2010. PHOTO | FRANCIS NDERITU | NATION MEDIA GROUP 

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Auditor-General Edward Ouko has raised the red flag over blatant misuse of billions of shillings allocated to the National Government-Constituency Development Fund (NG-CDF).

This is according to recent audit reports that majority leader Aden Duale has tabled in the National Assembly.

About Sh5 billion is allocated to the NG-CDF in 290 constituencies annually but the audit as at the year ending June 30, 2017 has revealed that many constituencies have no documentation to back up huge expenses. Mr Ouko termed this worrying.

MPs were previously in charge of the fund but the law was amended with the new Constitution that inaugurated NG-CDF management committees. However, they oversee use of the funds and have a say on who sits in management committees.


The billions were largely used for bursaries for students in primary and secondary schools, and other institutions of learning, as well as construction of classrooms and murram roads. Some shares were for finance functions that are devolved. 


For instance, Juja Constituency was on the spot over unsupported bursary disbursements of Sh27.6 million.

The expenditure was not supported by acknowledgement letters or receipts from institutions which received the bursary awards. documents which would have confirmed whether the money was received and accounted for.

The indication, therefore, was that the money may not have been used for the intended purpose.


The audit of Samburu North Constituency showed that financial statements reflected disbursement of bursaries amounting to Sh48.2million against a budget of Sh58.2million. However, no schedule was produced to support the expenditure.

“The legality or regularity of the award of bursaries could not be ascertained in the absence of a set criteria,” Mr Ouko says in the report.

In Mwala constituency, projects worth Sh271.7 million stalled or remained unimplemented at least in the period under review.

There were also inaccuracies in the financial statements such that despite a bank balance of Sh13.2 million as at June 30, 2017, financial statements showed one of Sh9.9 million.

The difference were not explained.


The Auditor-General also flagged an illegible expense of Sh6.1 million on health and water, which are devolved.

In Ndaragwa constituency, Sh2.7 million reportedly allocated to the construction of mason water tanks and piping works in Gwa Kungu and Nyakinyua could not be accounted for.

Physical verification of the projects revealed no tanks were constructed and that new pipes were connected to old tanks.

“No expenditure returns and other related records were produced for audit verification. The regularity of the disbursement cannot be confirmed,” the report says.

The disbursement of Sh18.9 million for construction, completion and rehabilitation of administration blocks, classrooms and toilets in various schools in the area was also questioned.


The case was similar in Mumias West constituency, blighted by delays in implementation of projects.

The management had planned to implement 402 projects valued at Sh355.1 million from 2013/14.

As at June 30, 2016, four health projects and two road projects valued at Sh9.2 million had stalled. About 16 others valued at Sh16.3 million were ongoing but various anomalies - cracks and peels on newly done floors, poor painting, no electrification and project abandonment by contractors - were detected.

In Mandera East, about Sh223.7 million could not be accounted - there was a variance between the cash book balance and statements of assets balance.

The auditor also found irregular procurement of secondary school projects, flouting of procurement laws and unaccounted for bursary expenses.


In Dagoretti South constituency, the auditor disclosed that the fund budgeted to spend Sh156million but that the overall actual expenditure amounted to Sh68.7 million, an under-expenditure of Sh87.2million.

According to the auditor, further analysis of the budget indicated that transfers to other government units and other grants and transfers were budgeted at Sh45.3million and Sh95.5million respectively.

However, only Sh19.3million and Sh41million respectively were put to use, resulting in budget underutilisation of Sh26 million and Sh54 million respectively.

In Bondo constituency, the auditor flagged unauthorised reallocation of bursary funds of Sh20million, including Sh4.9million by the project management committee to three secondary schools.

The funds were meant for the construction of an administration block from Got Matar and a classroom in Orengo Secondary School, while an additional Sh1.4 million was for the renovation of classrooms.