Auditor General reports untraceable Sh20.3 billion loan in affordable housing project accounts

The Auditor General has raised questions regarding the whereabouts of Sh20.3 billion intended for the Kenyan government's flagship housing initiative. During a presentation to the National Assembly’s Public Accounts Committee, Nancy Gathungu revealed that her office could not find evidence of these funds in the financial records of the State Department for Housing and Urban Development for the year ending June 30, 2024.

According to the audit findings, while the government had recorded the receipt of this substantial loan, the actual movement of the money into the designated project accounts remains unverified. This discrepancy has prompted the audit office to issue a qualified opinion on the department's financial statements. Gathungu noted that without clear banking entries or expenditure trails, the transparency of the fund's management is currently compromised.

Lawmakers on the committee expressed concern over the potential for financial mismanagement within the high-profile program. The State Department officials were pressed to provide a reconciliation of the accounts to show how the Sh20.3 billion was utilized or where it is currently held. The department had previously indicated that these funds were part of a wider financing framework to accelerate the construction of low-cost units across the country.

The audit also highlighted broader challenges in the accounting of the Affordable Housing Levy. Gathungu pointed out that the lack of a robust tracking mechanism for the billions collected from taxpayers makes it difficult to ensure that every shilling is directed toward the intended construction sites. The department has been directed to provide a comprehensive breakdown of all loans and levies received to date to clear the audit queries.