Treasury Under Scrutiny as Auditor-General Flags Missing Records in Equalisation Fund

The National Treasury is facing renewed scrutiny over the management of Kenya’s Equalisation Fund after audit concerns and parliamentary questions exposed persistent challenges in accounting for money intended to improve services in marginalised communities.

The fund was established under Article 204 of the Constitution to help bring basic services in historically disadvantaged areas closer to the standards enjoyed elsewhere in the country. Its projects target essential services, including water, roads, healthcare, sanitation and electricity.

Auditor-General Nancy Gathungu has previously raised concerns about billions of shillings that had not been transferred to the fund despite constitutional entitlements. An audit report published in May 2025 highlighted a substantial funding shortfall and questioned the Treasury’s failure to release the required amounts consistently.

The concerns have continued into 2026. In August, lawmakers questioned Treasury Cabinet Secretary John Mbadi over delayed disbursements and incomplete projects. Treasury figures presented to Parliament showed that the fund had received KSh22.42 billion against cumulative constitutional entitlements of KSh90.34 billion, leaving an outstanding balance of KSh67.92 billion.

The figures have raised questions about whether the fund is achieving its constitutional purpose and why communities continue to wait for projects intended to improve their living conditions.

In Baringo County, Treasury reported that only KSh174.15 million of KSh595.03 million appropriated for projects under the 2023 Appropriation Act had been transferred to the county’s special-purpose account by June 30, 2026. This represented an absorption rate of about 29 per cent.

Mbadi attributed slow implementation partly to delays by county governments in submitting project proposals and funding requests. He also said the government would seek legal advice on the possibility of revisiting the framework governing direct implementation of projects.

The debate has placed pressure on Treasury to provide clearer records, accelerate disbursements and strengthen monitoring systems. Lawmakers have warned that continued delays could undermine confidence in the fund.

For residents of marginalised areas, the central concern is whether allocated money will translate into completed projects and improved public services.

The latest scrutiny highlights the need for transparent financial records, timely funding and clear accountability for every stage of project implementation.

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