The Institute of Certified Public Accountants of Kenya (ICPAK) has sounded a stark warning over a colossal Sh1.7 trillion in unaccounted-for public expenditure, a figure that casts a long shadow over the nation's fiscal management. In a statement released on Wednesday, 19 November 2025, in Nairobi, the professional body attributed the massive sum to persistent issues including unsupported documentation, escalating pending bills, and widespread irregular procurement processes across government ministries, departments, and agencies (MDAs).

This alarming disclosure intensifies concerns about public financial accountability at a time when Kenyans are grappling with a high cost of living and a heavy tax burden. The Sh1.7 trillion figure represents approximately 44% of Kenya's Sh3.9 trillion budget for the 2024/2025 financial year, underscoring the scale of the potential leakage of public funds.

Corroboration from the Auditor-General

ICPAK's findings align with and amplify the persistent concerns raised by the Office of the Auditor-General (OAG). In her latest reports for the 2023/2024 financial year, Auditor-General Nancy Gathungu has consistently highlighted systemic weaknesses in public finance management. The OAG's audits have revealed billions lost or misused due to poor project planning, unauthorised expenditures, mismanaged loans, and procurement irregularities.

Recent parliamentary committee sessions have brought these issues into sharp focus. For instance, the Public Accounts Committee (PAC) has been scrutinising the National Treasury over billions in on-lent loans to Kenya Airways, disbursed between 2019 and 2023 without formal agreements being signed. The Auditor-General noted that this exposure, including interest and penalties, left the recoverability of over Sh55 billion from the airline in doubt. Similarly, a Sh6.19 billion expenditure for the acquisition of a 60% stake in Telkom Kenya was flagged for lacking prior parliamentary approval as required by law.

The Human and Economic Cost

The implications of such a vast sum of unaccounted funds are profound for both the economy and the average citizen. The Sh1.7 trillion could have been used to address critical gaps in public service delivery. For context, the entire education sector, which receives the largest single allocation, was budgeted at Sh656.6 billion for FY 2024/25. The unaccounted-for amount could have funded the nation's education budget more than twice over, or significantly accelerated major infrastructure projects, which received an allocation of Sh477.2 billion.

Economists and civil society groups argue that this level of fiscal leakage places immense pressure on Kenya's debt sustainability. The government's fiscal deficit for FY 2024/25 is projected at over Sh500 billion, which will be financed through further domestic and external borrowing. Transparency International Kenya has repeatedly called for greater accountability in public resource management to curb corruption and ensure that borrowed funds are used for their intended public benefit.

A Pattern of Systemic Weakness

The issue of unaccounted-for funds is not new, but the scale highlighted by ICPAK suggests the problem is escalating. Previous audits have exposed significant irregularities that point to deep-rooted challenges:

• Donor Funds: An August 2025 report from the OAG revealed that approximately Sh2.5 billion in expenditures for donor-funded projects during the 2023/2024 financial year lacked proper documentation.
• eCitizen Platform: Audits have also flagged the government's flagship digital payment platform, eCitizen, with reports indicating that billions of shillings in collections remain unaccounted for, exposing the state to revenue leakage.
• County Governments: A Senate committee analysis of the Auditor-General's 2023/24 reports warned that county governments risk losing Sh533 billion due to widespread weaknesses in financial management.

In its statement, ICPAK reiterated its commitment to supporting the Auditor-General's office and pushing for the implementation of audit recommendations. The body has called for a zero-fault audit regime and urged regulatory agencies and Parliament to enforce stricter oversight to safeguard public resources. As the Public Accounts Committee continues its hearings, pressure is mounting on accounting officers within government MDAs to provide answers and on the National Treasury to implement robust controls to stem the financial haemorrhage that ultimately undermines Kenya's economic stability and development agenda.