Kenya’s Contingencies Fund has come under sharp scrutiny after the Auditor General exposed misuse and weak accountability in the disbursement of Ksh6.5 billion meant for emergencies.
The audit, covering the financial year ending June 30, 2024, shows billions were withdrawn without clear justification, while several ministries failed to account for funds received.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 financial law.
Top on the list of concerns is Ksh1.07 billion in refunds that could not be verified. The Ministries of Defence, Internal Security and National Administration, and Irrigation did not submit expenditure returns, making it impossible to confirm how the money was spent.
“In the circumstances, the validity of the amount disbursed from the fund of Ksh1,070,000,000 could not be confirmed,” the report stated.
Gathungu further flagged Ksh130 million spent by the State Departments for Public Works, Crop Development, and Livestock, noting the funds went to goods and services that did not meet the legal threshold for emergency spending.
Another major red flag was Ksh3.83 billion advanced to the State Department for Arid and Semi-Arid Lands and Regional Development between December 2023 and June 2024, even though the same activities had already been included in the approved supplementary budget.
“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,” Gathungu observed.
The Contingencies Fund, created under Article 208 of the Constitution, is designed to meet urgent, unforeseen needs. It is administered by the National Treasury with a ceiling of Sh10 billion.
During the 2023/24 financial year, Ksh6.53 billion was drawn from the fund, more than double the Ksh3.11 billion spent the previous year. Much of the money went to drought and flood mitigation, including El Niño response.
The audit comes at a time when Treasury is grappling with shrinking revenues and ballooning pending bills, which hit Ksh526 billion by June 2025. Despite recording a 79.76% budget absorption rate, the Auditor General insists the government must tighten controls and enforce accountability in emergency financing.
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