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.
