Kenya Forest Service on spot as audit uncovers illegal forest deals

A new audit has exposed a breakdown in governance that has left public forests nationwide vulnerable to capture by private interests.

Auditor General Nancy Gathungu, in the review of KFS accounts as of June 30, 2025, paints the picture of an institution unable to enforce accountability.

She highlights in the dossier tabled in Parliament that billions in public funds are untraceable and key legal safeguards are routinely ignored.

Core to the audit query is the participatory forest management model, which allows community forest associations to co-manage public forests.

The audit found that across the country, these associations have been operating without submitting audited accounts, thus handling vast sums of money without scrutiny.

“For all the previous years, the association has not submitted certified accounts for review by an external auditor,” the report states in the case of Friends of Karura Community Forest Association.

She cast doubt on the accuracy of at least Sh1.3 billion that the association collected through public contributions and donations.

“The accuracy and completeness of revenue from the contributions could not be confirmed,” the report reads in part, the findings suggesting a widespread failure rather than isolated lapses.

The Karura Forest case was singled out for collecting revenue that was neither disclosed nor remitted to KFS.

This was even as the Auditor General warned that similar practices are widespread, prompting plans for a special audit into all such associations.

“The office is planning to undertake a special audit in this area,” Gathungu said, citing anomalies including missing financial statements.

The report also uncovered blatant violations of the law in the awarding of forest management agreements.

In one case, an association was granted a 25-year contract, which is five times longer than the maximum period allowed under participatory forest management guidelines. 

It emerged that even basic financial controls were ignored.

A 2021 agreement between KFS and a forest association required the opening of a joint bank account for all revenue collected.

Auditors found that no such account existed and no financial statements had been submitted.

Gathungu said the situation made it impossible to verify compliance with laws such as the Public Finance Management Act, 2012.

The audit further exposed a sprawling network of unregulated and illegal operations within gazetted forests.

In Karura alone, a trust fund was found to be running a seedling business and collecting revenue outside the government’s eCitizen platform, in violation of a 2024 National Treasury directive.

Auditors further flagged a restaurant and the Karura Forest Environmental Education Trust as operating without valid KFS licences.

The audit documented 506 unlicensed facilities operating within protected forests, including 303 schools, 102 churches, 34 health centres, 24 government agencies and 39 telecommunication masts.

An additional 124 facilities were found to be operating on expired licences as of June 2025.

The report also raises concerns over how public forest land is being allocated to private developers.

In Ngong Forest, KFS approved a 25-year lease for the construction of a resort and wellness retreat on five acres of forest land.

Auditors found no evidence of due process, with critical documents, including architectural plans, environmental impact assessments and the basis for revenue-sharing terms, not provided for review.

The lease terms, including a 5 per cent gross turnover fee and a Sh1 million performance bond, could not be justified. 

“In the circumstance, the regularity of the leases and value for money… could not be confirmed,” Gathungu said.

The audit also uncovered direct encroachment and land grabbing in multiple forests across the country.

A total of 555.9 hectares of forest land in areas including Kipkabus, Tingwa and Ngong have been illegally acquired by private parties.

A further 29.5 hectares in Uasin Gishu host unlicensed installations, the crisis driven largely by the absence of legal ownership documents.

Out of 265 gazetted forest blocks covering over 2.5 million hectares, only 77 have title deeds.

The rest of the blocks remain undocumented, leaving them highly susceptible to illegal acquisition.

Gathungu has further flagged financial instability at the service, rendering the agency technically insolvent. Its liabilities of Sh3.75 billion far exceed its assets of Sh2.05 billion.

“The Service is therefore technically insolvent and may not be able to meet its short-term obligations,” the report states.

INSTANT ANALYSIS

The future of the country’s forests, which are critical ecosystems that support biodiversity, water catchments and climate resilience, is in doubt. The central questions that remain unanswered include how much revenue has been lost, who benefited from the questionable deals, and whether the Kenya Forest Service can be reformed to reclaim control over the country’s rapidly shrinking forest resources.