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The Office of the Auditor-General’s Special Audit Report on the Government Digital Payments Platform (eCitizen), covering the financial year ended June 30, 2024, has exposed multiple systemic weaknesses in how Kenyans pay for services such as passports, business registrations, and driver’s licences.
Led by Auditor-General Nancy Gathungu, the report flags gaps in technology governance, financial controls, and legal frameworks that have left billions of shillings at risk of misappropriation.
1. Irregular convenience fees
A striking finding is the irregular collection and retention of convenience fees.
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Auditor General Nancy Gathungu
Gazette Notice No. 9290 of 2014 stipulated that administrative fees on eCitizen transactions be prorated based on service costs, yet the National Treasury continued to charge a flat Sh50 per transaction.
Between December 14, 2023, and June 30, 2024, this practice generated an overcharge of Sh30.7million on the old payment gateway and Sh319million on the new gateway, totalling more than Sh350million in excess fees collected from ordinary users.
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2. Unauthorised fund transfers
Equally concerning is the diversion of funds from the mandatory M-Pesa Paybill 222222.
Although all eCitizen payments should auto-settle into a designated KCB Bank account, four transactions on January 25, 2024, totalling Sh127.85million, were instead transferred to private entities with no audit trail or approval documentation.
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Auditor General Nancy Gathungu
The ‘Pesaflow’ Equity Bank account used for these transactions was not among the Treasury-approved collection accounts, making it impossible to verify how much public money passed through it.
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3. Gaps in governance
Beyond fee and fund diversions, the audit highlights the absence of Service Level Agreements with financial service providers.
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Auditor General Nancy Gathungu
Without SLAs, neither the National Treasury nor MDAs can enforce performance standards or demand timely remittance of collected revenues.
As a result, Sh7.05billion held in various collection and settlement accounts remains in limbo, raising fears that service providers could exploit public funds for their own benefit.
The report also uncovers reconciliation failures between the eCitizen portal, revenue statements submitted by MDAs, and the government’s financial ledger.
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Auditors found Sh2.57billion in receipts that could not be matched to any Pesaflow invoices, and discrepancies of up to Sh515million in weekly settlement reports for the Tourism Fund alone.
Such gaps make it virtually impossible for the Treasury to monitor collections in real time or ensure all revenues reach the Consolidated Fund.
For everyday Kenyans who rely on eCitizen to access essential government services, these revelations sound a warning: weak controls and opaque transactions on the government’s flagship digital payments platform may translate into higher costs, slower service delivery, and diminished public trust.
Parliament has since initiated inquiries, and the Treasury has pledged to tighten legal frameworks, enforce SLAs, and improve reconciliation processes – but for now, the audit underscores the urgent need for transparency and accountability at every step of the eCitizen payment chain.