Kenya's financial dealings with the African Union (AU) and other international organisations have come under sharp scrutiny following revelations of an irregular transfer of Ksh2.3 billion to the National Treasury, raising a lot of questions on the handling of international subscriptions.
This comes less than a week after the government was put on the spot to explain how it utilised funds in the recently concluded African Union Commission (AUC) elections where Kenya's candidate Raila Odinga lost after withdrawing in the sixth round.
An audit report released by Auditor General Nancy Gathungu on Monday flagged the Ksh2.3 billion transfer to the Treasury noting that there was no supporting documentation or approvals to justify the surplus remittance from the African Union and Other International Organizations Subscription Fund.
This violated legal financial regulations which mandate that funds in the account should be strictly used for paying Kenya's contributions to the AU and other international organizations.
''The statement of receipts and payments reflects a surplus transfer to the Exchequer of Ksh2,300,000,000 as disclosed in Note 10 to the financial statements. However, documentation to support approval of the payment was not provided for audit,'' read part of the Auditor General's report.
''This was contrary to Regulation 5 of the Public Finance Management (African Union and Other International Organizations Subscription Fund) Regulations, 2017 which provides that any payment out of the Fund shall be pursuant to the object and purpose for which the Fund is established which is contribution to the African Union and any other international organization to which Kenya has a financial obligation.''
The Auditor General's report acknowledged that Kenya had consistently met its subscription payments to international organizations. However, the findings raised concerns about possible mismanagement or diversion of funds intended for international obligations.
''Until 2017, the Government through the Treasury had been paying subscriptions to International Organizations through Vote R53 – Consolidated Fund Services – Subscriptions to International Organizations under various pieces of legislation namely: International Finance Corporations Act, CAP 466, International Development Association Act, CAP 465, Bretton Woods Agreements Act, CAP 464, the African Development Bank Act, CAP 492 and the Multilateral Investment Guarantee Agency Convention, 1988 (Revised 2010),'' the report added.
The government through the National Treasury has been additionally blamed for failing to repeal earlier laws that governed remittances to international organisations to avert multiple payments.
The fact that the laws governing international subscriptions have not been harmonised also raises fears of possible duplicate payments or financial inefficiencies.
''Management has not caused the revocation or repealing of the earlier laws to be in tandem with the current legislation and therefore avert the risk of making multiple payments to the international organizations,'' the report pointed out.
The report further revealed that underfunding in the budget had affected the execution of planned activities, potentially impacting Kenya’s influence in continental affairs. With a Ksh4.5 billion funding shortfall, the country's ability to push its strategic interests in the AU and other international organizations may have been compromised.
The government is expected to respond to the audit queries even as pressure mounts for transparency in how Kenya handles its financial commitments to international organizations.
