By Kennedy Nalyanya
Kenya's Auditor-General Nancy Gathungu has raised serious red flags over the government’s e-Citizen digital payment platform, flagging potential misuse of billions of shillings and widespread accountability gaps. In a new audit report, Gathungu warns that financial mismanagement on the platform could be jeopardizing public services across the country.
The audit for the financial year ending June 30, 2024, reveals over Ksh.9.6 billion in questionable transactions and poor oversight. This includes billions held in limbo and receipts that can't be traced, pointing to a system riddled with vulnerabilities.
A major concern highlighted in the report is the lack of Service Level Agreements (SLAs) between the National Treasury and the financial service providers that handle e-Citizen payments. According to the audit, this critical oversight has left a staggering Ksh.7.05 billion sitting in collection and settlement accounts without a clear legal framework.
Gathungu warns that without these formal agreements, the service providers could be using public funds for their own benefit, delaying remittances and undermining the ability of government ministries and agencies to deliver essential services.
The audit also uncovered Ksh.2.57 billion in receipts that couldn't be matched to any invoices in the Pesaflow system, which facilitates the digital payments. Auditors attribute these unaccounted-for receipts to partial, duplicate, and erroneous payments, warning that the lack of traceability leaves the system vulnerable to fraud and revenue leakage.
Adding to the concerns, the audit found glaring inconsistencies in how collections are reported and settled. For example, there was a discrepancy of Ksh.515 million between what the Government Digital Payments Unit reported was due to the Tourism Fund and the amount actually remitted. Gathungu noted that this “implies that not all revenue collected is remitted to MDAs and Counties which negatively affect service delivery.”
The Auditor-General warns that these systemic weaknesses pose a direct threat to public services. With funds being delayed, misallocated, or simply unaccounted for, government agencies and counties may struggle to provide critical services to citizens who rely on the timely collection and remittance of these revenues.
This isn't the first time e-Citizen's financial transparency has been questioned. Gathungu previously flagged the platform's revenue for the year ending June 2023, raising concerns over the accuracy of Ksh.15.5 billion in revenue receipts.
The e-Citizen platform is run by a consortium of three companies: Webmasters Kenya Limited, Pesaflow, and Olive Tree Media. Despite the audit findings, the consortium has defended its accountability, stating that all transactions are verified before they invoice the government.
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