The audit for the financial year ended June 30, 2025, shows nine officers serving abroad received responsibility, entertainment, non-practising, domestic, special legal and salary market adjustment allowances amounting to Sh987,480 in June 2025. This was despite already earning Foreign Service Allowance in addition to their basic salary.
According to the report, the payments contravened the Administrative Rules Governing the Service of Kenya Missions.
The rules provide that officers posted outside the country are entitled to a monthly Foreign Service Allowance alongside their basic salary. The regulations also prescribe the limited circumstances under which entertainment allowance may be paid.
"Review of the department's payroll revealed that officers on posting continued to be paid allowances in addition to their basic salary," Auditor General Nancy Gathubgu says.
"In the circumstances, management [State Department of Foreign Affairs] was in breach of the law."
The finding is one of several financial and governance concerns raised in the audit, pointing to weaknesses in payroll administration, implementation of audit recommendations and internal financial controls in the State department.
Gathungu also questioned the continued management of confidential security expenditure, saying previous recommendations aimed at improving accountability have yet to be implemented. This is despite recurring concerns.
During the financial year under review, the State Department incurred expenditure on confidential security operations.
While the accounting officer issued the required certificate confirming the funds had been used in accordance with the Public Finance Management Regulations, the Auditor said the existing oversight framework remains inadequate.
The report notes that confidential expenditure has continued to increase over the years, yet regulations do not clearly define which government entities qualify to incur such expenditure or what constitutes security-related operations.
Gathungu recommends reviewing the Public Finance Management (National Government) Regulations to clearly define eligible entities and security-related operations, while introducing stronger internal oversight mechanisms, including detailed budget projections and post-operation financial summaries.
According to the report, the proposed measures would strengthen governance, improve accountability and ensure confidential funds are utilised responsibly without compromising national security.
However, the audit found that previous recommendations had gone unheeded.
"As at the time of audit in November 2025, no action had been taken to implement the audit recommendations," the report says, adding that the effectiveness of management's implementation of previous recommendations could, therefore, not be confirmed.
The State Department was also cited for breaching labour laws after 106 employees received net salaries below the statutory minimum threshold.
The audit established that the employees took home less than one-third of their basic salary after various deductions, contrary to Section 19(3) of the Employment Act, 2007, which limits total deductions from an employee's wages or salary to two-thirds.
The law is intended to protect workers from excessive salary deductions and ensure they retain at least one-third of their earnings after statutory and authorised deductions.
The Auditor found that the payroll arrangements failed to comply with this legal requirement.
Once again, the Auditor General concluded that management had breached the law.
