MPs on spot: New audit exposes CDF misuse

Fresh findings by Auditor General Nancy Gathungu expose how constituency management committees, with MPs as patrons, could be mismanaging the NG-CDF kitty.

The examination of NG-CDF expenditures for the year ending June 30, 2025, also highlights repeated breaches of the law.

In Embakasi East, the audit says there was no project to show for Sh59 million disbursed to three schools during the year under review.

The transfers were made to Donholm Primary School (Sh27.5 million), Maua Primary School (Sh20,826,404) and Embakasi Primary School (Sh11,323,529).

Gathungu reports that audit inspections of the projects in the three schools conducted in September this year revealed that no project had been done.

“The value for money on the projects may not be realised,” the Auditor General said, adding that her office could not confirm the disbursements.

The pattern of financial mismanagement, legal violations, and questionable procurement practices repeats across many of constituencies.

Webuye West failed to prepare and submit quarterly financial reports as required by the Public Finance Management Act.

The constituency also did not give 30 per cent of procurement to enterprises owned by women, youth, persons with disabilities, and other disadvantaged groups.

During the year, only 11 per cent of the constituency’s 26 procurements went to members of the special groups.

Kinango and Embakasi East constituencies retained unspent funds totalling millions of shillings in Project Management Committee (PMC) accounts.

The money is supposed to be returned to the main constituency accounts as required by the NG-CDF Act. Embakasi East alone held Sh68.9 million in unreturned PMC balances.

Gathungu also raised concerns about the misuse of CDF cash in projects, painting a grim picture of potential losses.

Physical verification of projects revealed significant discrepancies between reported expenditures and actual implementation status.

In Thika Town, a completed ablution block costing Sh1.7 million was found lacking a required water tank.

At the time of audit inspection, its taps had been vandalised and disconnected from sewer systems, rendering it unusable.

In Makadara, two primary schools received Sh17.5 million for construction projects that hadn't even begun by September 2025, with no justification provided for the delays.

The Makadara constituency office construction project, with a contract price of Sh20 million, remained incomplete three years past its October 2022 deadline.The contractor received full payment.

Rongo constituency paid Sh5 million in full for a laboratory construction project that remained incomplete at the time of audit in September 2025.

The block lacked essential finishing works, including flooring, plumbing, and painting yet the contract had been paid in full.

“In the circumstances, there was no value for money of Sh1,712,320 invested in the construction of the ablution block," the Auditor General saidin the Thika Town report.

The sentiment echoed in findings across multiple constituencies where projects were paid for but either incomplete or non-functional.

Bursary disbursements showed consistent accountability failures across several constituencies.

Daadab disbursed more than Sh1 million without acknowledgement receipts from beneficiary institutions or proper supporting documentation.

Makadara distributed Sh1.7 million without vetting committee minutes or acknowledgement receipts.Some students appeared multiple times in payment lists under different institutions.

Embakasi East disbursed Sh76,201,000 (42 per cent of total revenue) without proper eligibility verification.

Further, the fund exceeded the legal 40 per cent limit for bursary allocations, risking insufficient funds for other essential projects.

Gathungu said, “Disbursing bursaries with no proper verification of eligibility or supporting documentation undermines transparency and diminishes accountability to the public.”

Beyond specific project issues, auditors identified broader systemic problems with the various CDF committees.

Daadab failed to address prior audit recommendations, with six categories of issues from previous years remaining unresolved.

Multiple constituencies, Daadab, Makadara, and Embakasi East, violated the requirements to report emergency fund usage within 30 days.

Daadab failed to report Sh11.9 million in emergency project expenditures.

It also had no asset register for land, buildings, vehicles, and computers, with no ownership documents provided for verification.

Makadara's PMC failed to maintain proper accounting records, submit required quarterly reports, or obtain approved work plans before fund releases.

The audit further flagged delayed funds and unimplemented projects.

Kitutu Chache South reported that Sh62 million out of Sh179 million was received late from the NG-CDF Board in May and June 2025, contrary to the law.

The constituency also had 27 approved projects totalling Sh61 million that remained unimplemented by the end of the financial year.

Budget planning experts have over time cited dire consequences of failing to disburse development project cash on time.

Similar issues affected Rongo, where seven climate change mitigation projects remained unimplemented, without explanation.

MPs, who are fiercely clinging to the funds and want NG-CDF anchored in the constitution,  have deflected responsibility for malpractices to fund account managers.

The Decentralised Funds Accounts Committee, led by Chairman Gideon Mulyungi, dismissed the 2024 report, which implicated MPs in NG-CDF mismanagement.

"This committee has pronounced itself on these false allegations. We do not implement CDF; the Fund Managers should be answerable in cases of irregularities," Dr Mulyungi said

The committee members questioned the Auditor General's reporting, terming Gathungu’s verdict as recurrent misreporting.

Reports of the 2024 period highlighted wastage in projects, with many shoddily done and others abandoned before completion.

The auditing team flagged projects with a combined value of Sh1.3 billion, where taxpayers received had no value for money.

Some Sh696 million worth of projects were poorly executed, while others existed only on paper.

Cases in Buuri, Turkana Central, Luanda, Tetu, and Kilifi North constituencies stood out.

In Mbeere South, Sh6 million was transferred to a primary school for a dining hall that did not exist.

Details of the constituency-level financial mismanagement have come at a time NG-CDF is under sharp scrutiny in the courts.

MPs are fighting in court to save the fund from being rendered illegal. The High Court had ruled the kitty as unconstitutional.

The appeals court is set to rule on the fund’s constitutionality on February 5, 2026, following an application by MPs.

The National Assembly has faulted the September 2024 judgment by the High Court.

Justices Kanyi Kimondo, Mugure Thande and Roselyne Aburili declared the NG-CDF Act of 2015, as amended in 2022, unconstitutional.

MPs are in a race against time as the lower court ordered that the kitty would cease to exist on June 30, 2026.

Rarieda MP Otiende Amollo argued that the court ignored expert evidence which showed that CDF is properly conceptualised.

The National Assembly’s lead lawyer said the judges failed to deduce that the fund only facilitates national government functions.

Despite political pushback, the audit findings present a compelling case for improved oversight and accountability mechanisms.

The recurring nature of similar violations across multiple constituencies suggests systemic rather than isolated problems in NG-CDF management.

INSTANT ANALYSIS

While many constituencies have witnessed transformative NG-CDF projects, a number remain vulnerable to mismanagement, poor oversight, and a culture of impunity. The report suggests that the legal and institutional frameworks governing the fund are insufficient to prevent the rampant wastage of public resources.