Kenya public finance oversight concerns

Kenya’s Controller of Budget, Dr. Margaret Nyakang'o, has raised alarms regarding billions of shillings in state-backed levies and funds that are currently “untraceable and unauditable” by her office. Because revenue streams such as the Housing, Petroleum, and Railway levies are held in independent accounts rather than the Consolidated Fund, they bypass constitutional safeguards and regulatory oversight.

Legal experts have noted that these arrangements may violate Article 206(1) of the Constitution, potentially creating parallel financial structures that limit parliamentary scrutiny.

In response to these gaps, Kenyan lawmakers are pursuing legislative amendments to the Public Finance Management (PFM) Act. The goal is to expand the Controller of Budget’s oversight powers to include the 75 national funds and various county funds that currently lack independent monitoring. Officials have highlighted significant risks, including the potential loss of up to Sh2 billion daily to mismanagement and over Sh30 billion in county funds operating outside the Integrated Financial Management Information System (IFMIS).