Kenyans have irregularly paid over Ksh2.1 billion through the Ksh50 transaction fee charged to access government services through the Government Digital Payments Platform (eCitizen), according to a new audit.
According to the Special Report on eCitizen published in March, the government illegally upcharged the transaction fees contrary to directives issued in Gazette Notice No. 9290/2014 dated December 23, 2014.
The audit found that instead of charging a nominal administrative fee per transaction as gazetted, which was to be a prorated percentage of the amounts paid, the National Treasury has continued to charge a convenience fee of Ksh50 per transaction.
eCitizen, which was launched in 2017 and rapidly expanded in 2022 after President William Ruto's ascent to power, irregularly collected over Ksh1.8 billion from the public during the period before January 23, 2023.
"Gazette Notice No. 9290 of 2014 dated 23 December 2014 required the Nominal Administrative Fee to be charged per transaction, which was to be a prorated percentage of the amounts paid. However, during the period prior to January 23, 2023, the National Treasury did not establish a prorating band," the report read in part.
"Instead, the Convenience Fee was charged at Ksh50 or USD1 per transaction, contrary to the Gazette Notice. In this regard, Ksh1,807,946,257 and USD3,333,989 were irregularly collected from the public."
An additional instalment of Ksh50 convenience fee charges between December 14, 2023, and June 30, 2024, led to an overcharge of more than Ksh30 million in the first collection gateway. The first collection gateway is the payment system used by government institutions that had been onboarded before President Ruto's directive for all MDAs to transfer payments to eCitizen.
The government collected a further Ksh319 million through the second collection gateway for MDAs that joined the system after Ruto's directives during the same period, bringing the total amount of money collected in convenience fees to over Ksh2.1 billion.
"Similarly, between December 14, 2023 and June 30, 2024, The National Treasury irregularly collected Convenience Fee of Ksh50 instead of prorating the Fee as stipulated in the Gazette Notice No. 17 422 of December 14, 2023, resulting to an overcharge amounting to Ksh30,729,415 of collections made through the previous payment gateway and Ksh319,029,250 for collections made through the new gateway," the report read.
The report also unearthed the unlawful diversion of funds from the mandatory 222222 Paybill for payment of government services to private accounts.
Although all amounts of money collected by eCitizen are expected to be transferred automatically to the settlement account held at a local commercial bank, one such illegal transfer to a private account was flagged on January 25, 2024.
The bank statements showed that there were four transactions made from the paybill account to private entities instead of the designated settlement account, amounting to Ksh127 million.
Another damning revelation in the report was the payment of over Ksh492 million for services offered to improve the system to a company that was not party to the agreement.
