Cash crisis threatens EACC graft fight, audit reveals

Auditor General Nancy Gathungu/HANDOUT

A severe cash crisis is threatening to cripple the fight against corruption in the country.

A new report has revealed how the national anti-graft agency is struggling with a big deficit and chronic underfunding.

The alarming financial state of the Ethics and Anti-Corruption Commission (EACC) is exposed in the latest audited report for the year ended June 30, 2025.

The report by Auditor General Nancy Gathungu shows the commission sinking further into the red.

This is despite successfully recovering Sh3.4 billion in stolen assets and preventing the loss of Sh16.5 billion of public funds.

The commission reported a net deficit of Sh89.1 million, a significant increase from the Sh61.2 million deficit in the previous year.

“Management disclosed the poor financial performance, attributing the increased deficit mainly to depreciation expense amounting to Sh131 million,” the report said.

While management blames non-cash accounting entries like depreciation, the auditor general has flagged this as a "material uncertainty" that threatens the EACC's long-term operational sustainability.

“The provisions for depreciation is not matched with any fund to the accumulated depreciation for the replacement to cover obsolescence in the asset base,” Gathungu said in the report seen by the Star.

“My opinion is not modified in respect of this matter.” 

More tellingly, the report shows the direct impact of budget constraints on frontline operations.

A plan to recruit 200 new staff was scrapped entirely due to "inadequate budgetary provisions," hampering the commission's capacity to handle its caseload.

This is reflected in its investigative output, where it completed only 229 corruption investigations against a target of 424.

Furthermore, the commission held Sh23 million in unpaid trade payables, which it attributes to underfunding from the National Treasury.

“In all this, we remain cognisant of the tight economic times we are in as a nation,” EACC chairperson David Oginde acknowledged in his statement.

“Though our budgetary allocation often falls far short of what we would require for effective output, we continue to exercise due prudence in the use of the public resources entrusted to us.”

The auditor general also raised concerns about the accountability of confidential funds used for security operations, recommending a tightening of regulations and internal controls.

Besides the cash constraints, she called for more prudence in the management of the agency’s confidential expenditures.

She said much as the commission filed the necessary returns, like the certificate of confidential expenditure and declaration affirming proper use of funds, more needs to be done.

“There is a need to enhance accountability of confidential expenditures through review of regulations to clearly define entities eligible for confidential security-related operations,” Gathungu said.

She said EACC, like other entities that have the vote, should establish internal oversight mechanisms and processes that include budget projections and post-operational summaries.

Gathungu said the materials would help address risks and ensure responsible use and accountability of the funds, beyond the certificate.

“The measures will strengthen governance, foster trust and ensure funds are utilised responsibly without compromising state security,” the report reads.

The financial strain comes at a time when the EACC is demonstrating critical results in its operations and case management.

The report highlights a major success in court, where the conviction rate for corruption cases surged to 64 per cent, up from a dismal 26 per cent the previous year.

The commission also disrupted corruption networks to avert losses of Sh16.5 billion, a figure more than double its annual target.

The paradox is that EACC is mandated to lead the national anti-corruption effort, yet its own financial health is precarious.

Among the calls the agency has made to Parliament is to be allowed to retain 50 per cent of the value of assets they recover from graft cases.

CEO Abdi Mohamed, in March this year, urged the Senate to consider amending the law to authorise the retention as a way of sustaining the agency’s operations.

He argued the additional amounts–estimated at Sh2.5 billion annually- would enable the EACC to hire more staff and speed up investigations and other activities.  

INSTANT ANALYSIS

With a backlog of unresolved deficits awaiting a verdict from the Parliamentary Public Accounts Committee, the EACC’s ability to maintain its intensified fight against graft is in question. The report paints a clear picture that without a more reliable and adequate financial lifeline from the National Treasury, the agency’s crucial work of recovering public wealth and holding the corrupt accountable faces an uncertain future.