Housing Principal Secretary Charles Hinga has asked the Ethics and Anti-Corruption Commission to launch investigations into Nyamira and Kajiado counties over alleged misappropriation of donor funds.
The money, the PS said, was meant for a major donor-supported project targeting informal settlements.
In a letter dated October 2 and addressed to EACC chief executive Abdi Mohamud, the PS said the two counties had failed to account for millions of shillings disbursed jointly by the government, the International Development Association and the French Development Agency (IDA).
The money was allocated under the Second Kenya Informal Settlements Improvement Project (KISIP 2), a programme that seeks to upgrade living conditions in informal settlements through improved infrastructure and strengthened tenure security.
Hinga said internal audits conducted in both counties revealed serious financial irregularities that required deeper investigation.
Under the project’s implementation framework, the internal audit department must issue an audit and assurance reports every calendar year to ensure transparency and accountability.
According to the PS, the audit team said that Kajiado county submitted a bank statement covering the period between January 1 and March 31.
However, the statement allegedly omitted several transactions, raising suspicions about possible manipulation of financial records.
“The report omitted some transactions, raising concerns about the possible manipulation of financial records,” Hinga wrote, adding that full disclosure is mandatory for all participating counties.
Nyamira is accused of even more alarming financial anomalies. The audit flagged unexplained cash withdrawals amounting to Sh17.93 million, along with a separate transfer of Sh4.78 million.
Despite repeated requests, the county allegedly failed to provide supporting documents for the transactions.
While the Sh4.78 million was eventually returned to the project account, the PS said Nyamira offered no explanation for the nearly Sh18 million withdrawn, leaving the matter unresolved.
On September 9, Hinga wrote to Governor Amos Nyaribo directing him to refund all irregularly withdrawn funds and provide bank statements confirming the refund by September 30.
He also directed the county to supply a detailed account and supporting documents for all transactions by September 26.
Failure to comply, the PS warned, would result in suspension of the project.
In a later communication, Hinga informed the county that the project had been suspended due to its failure to respond to audit queries or provide the requested documents.
He said that Nyamira’s actions violated several clauses of the KISIP agreement, the Public Finance Management Act, 2012, the 2025 Regulations and the project’s finance management manual.
“The county has either refused or ignored the request to provide answers to the queries and has also refused to provide documents to the auditors,” Hinga said.
KISIP 2 aims to improve access to basic services such as roads, footpaths, drainage, street lighting, water, sanitation and social amenities in informal settlements across multiple counties.
It also includes land tenure regularisation, socioeconomic inclusion planning and institutional capacity building to support sustainable slum upgrading.
The programme is funded through an Investment Project Financing arrangement valued at Sh21.45 billion, with a significant contribution from IDA.
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