KeRRa/HANDOUT
The Kenya Rural Roads Authority is on the spot after the Auditor General flagged delayed road projects worth more than Sh69.4 billion.
The auditor also unearthed unexplained financial variances and a severe staff shortage that could undermine service delivery.
The audit for the financial year ending June 30, 2025 paints a picture of an agency grappling with delayed contractor payments and weaknesses in financial management despite overseeing billions of shillings in road infrastructure.
The report questions the value for money of several road projects after finding that dozens had fallen behind schedule, with some still not having begun despite being listed as ongoing.
According to the Auditor General, KeRRA had 136 ongoing projects during the review period. However, two projects had not started despite being included in the implementation programme.
Another 43 projects, with a combined contract value of Sh69.4 billion, were running behind schedule. The projects began between April 2020 and October 2022.
Management attributed the slow progress to delayed payments to contractors.
Although contractors had completed certified works worth Sh1.16 billion, only Sh469.7 million had been paid, leaving unpaid certificates amounting to Sh693.9 million.
The report further reveals that 47 performance-based routine maintenance contracts had reached 100 per cent completion.
Despite the works being completed, contractors were still owed Sh13.19 billion, exposing the authority to possible interest penalties and raising concerns over delayed settlement of pending bills.
"The value for money already incurred on incomplete projects could not be confirmed," the Auditor General says.
The audit also raises concerns over discrepancies involving funds received through the fuel securitisation programme managed by the Kenya Roads Board.
KeRRA reported receiving Sh27 billion from the programme. However, KRB records reflected disbursements of Sh27.53 billion, leaving an unexplained variance of Sh523.3 million.
Auditors also found that KeRRA failed to provide records showing how pending bills earmarked for settlement through the securitisation facility had been identified and paid.
Without the documentation, auditors said they could not verify the completeness and accuracy of the reported balances.
The report further questioned receivables worth Sh1.22 billion after auditors discovered a credit balance of Sh13.5 million that had been improperly offset against debtors, contrary to international accounting standards.
The agency is also sitting on Sh60.58 billion in pending bills, although the figure dropped by 22 per cent from the previous year's Sh77.58 billion.
The Auditor-General warned that failure to settle pending bills when they fall due distorts future budgets because the debts become the first charge on subsequent allocations.
Another concern is long-outstanding receivables amounting to Sh19.6 billion, some of which have remained uncollected for more than three years.
Auditors noted that KeRRA had not developed a credit policy to guide recovery of the debts, making it impossible to establish whether the money would ever be recovered.
The report also found that the authority breached public service human resource rules after paying some employees net salaries below one-third of their basic pay, contrary to the Public Service Commission Human Resource Policies and Procedures Manual.
Employee costs during the year stood at Sh2.84 billion.
Beyond financial management, the audit points to a staffing crisis.
KeRRA has an approved establishment of 1,209 employees but had only 519 staff in post by June 30, 2025.
The shortfall of 690 employees, representing 57 per cent of the required workforce, was cited as a major governance and operational risk.
According to the Auditor General, the understaffing could overload existing employees and negatively affect delivery of road projects across the country.
The report also notes that several issues raised in the previous financial year's audit remain unresolved.
They include inaccuracies in property records, long-outstanding payables, underutilisation of the enterprise resource planning system, delayed roadworks and non-compliance with salary regulations.
