The report for the 2015/2016 financial year describes a litany of misspending and poor accounting under President Uhuru Kenyatta, who is several months into a second term after an election in which he again vowed to tackle graft.
Kenya can't account for $400 million of public money
Kenya's government cannot account for $400 million in public funds, according to a damning report from the auditor general highlighting the country's failure to crack down on graft and misuse of state resources.
Less than a third of financial statements of ministries, departments and agencies that were scrutinised were clean, according to the report presented to parliament last week.
Auditor general Edward Ouko noted that this was however an improvement, with only six percent of financial statements declared clean five years ago.
"Accounting for public funds is still wanting," wrote Ouko.
Of $12.4 billion (10 billion euros) in recurrent and development spending, only 3.45 percent was spent "lawfully and in an effective way", according to the report.
While some entities failed to submit statements at all, others were unable to explain transfers of millions of dollars, unlawful cash withdrawals or "fraudulent" double payment of bills.
The defence ministry came under fire over the purchase of seven aircraft from the Royal Jordanian Airforce for $15 million in 2007, which were never used due to defects and, the report found, are now being used as "sources for spare parts".
The ministry also paid five times the market price for two hydraulic excavators, and spent some $8 million on projects and equipment which never materialised.
Meanwhile the interior ministry could not account for 51,500 pairs of shoes worth $1.7 million allegedly destined for police officers, who were found in worn-out footwear or having resorted to buy their own.
'Post-mortem of grand theft'
"Our concern is that every year, the auditor general prepares such reports detailing loss of huge sums of money and presents them to parliament but they are never acted upon," read an editorial by the Daily Nation newspaper.
In 2017 Kenya fell to 143rd out of 180 countries in Transparency International's annual corruption index.
While Kenyatta has vowed to tackle corruption, veteran activist John Githongo is sceptical.
"Theft has created Kenya's elite. That's our history. Stopping the theft would mean restructuring our economy and politics," he told AFP.
"That we've always had auditor generals who do these essentially post-mortem audits of grand theft is an interesting quirk of Kenyan political economy."
Ouko has battled to remain in his position, with a lawmakers' attempt to remove him over alleged abuse of office blocked by the high court in 2017.
His report also highlighted soaring debt that has raised alarm in East Africa's richest and most diverse economy, after rampant borrowing in recent years.
Moody's last month cut Kenya's credit rating from B1 to B2 -- assigning a stable outlook -- warning it expected government debt to rise to 61 percent of GDP in the 2018/19 financial year from 41 percent in 2011/12.
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