Hundreds of schools, churches, health facilities and businesses have been operating illegally inside Kenya's protected forests, with a new audit exposing widespread violations that have gone unchecked while also raising serious concerns over financial management at the Kenya Forest Service (KFS).
The Auditor-General's report paints a picture of poor oversight within gazetted forests, pointing to unlicensed developments, illegal occupation of forest land, weak revenue collection systems and gaps in financial accountability.
According to Auditor-General Nancy Gathungu, auditors established that 506 facilities were operating without valid licences inside protected forests. They include 303 schools, 102 churches, 34 dispensaries and health centres, 24 government agencies and 39 telecommunication masts.
The report also found that another 124 facilities were operating using expired licences.
“In the circumstances, the regularity of the leases and value for money on the operations of the gazetted forests could not be confirmed,” the Auditor-General says.
The audit also highlights questionable commercial activities taking place in Karura Forest.
Auditors found that a registered trust was selling tree seedlings without channeling the revenue through the government's eCitizen platform. They also established that a restaurant and the Karura Forest Environmental Education Trust were operating without valid licences issued by KFS.
The report further questioned the operations of the Friends of Karura Community Forest Association after auditors found it had collected revenue from the forest but failed to remit the money to KFS.
The association also did not submit audited financial statements despite an agreement requiring all revenue collected to be deposited in a joint account.
“The office is planning to undertake a special audit in this area,” the report says.
The Auditor-General also questioned the award of a 25-year licence to a private company to develop a lodge and wellness retreat on five acres of Ngong Road Forest.
According to the audit, KFS failed to provide evidence showing how the investor was identified. The agency also did not produce environmental impact assessment reports, architectural drawings and other approvals supporting the project.
The report further exposes the financial position of KFS, warning that the agency is technically insolvent.
Auditors found that the service had current liabilities amounting to Sh3.75 billion compared to current assets of Sh2.05 billion, leaving it with a negative working capital of Sh1.7 billion.
“The service is technically insolvent and may not be able to meet its short-term obligations as and when they arise,” the Auditor-General warns.
The audit also questioned Sh23.7 million spent on insuring two KFS aircraft after management failed to provide aircraft valuation reports and insurance policies.
Auditors further raised concerns over Sh513.8 million owed to the agency by various debtors, noting that Sh300.2 million has remained outstanding for more than three years.
Although KFS had issued demand letters, the report says auditors did not find evidence that legal action had been taken to recover the money.
Questions were also raised over KFS assets valued at Sh2.94 billion.
The audit found that only 77 out of the 265 gazetted forest blocks under KFS have title deeds.
It further states that 1,374 acres in Kipkabus, Tingwa and Ngong forests were illegally acquired by private individuals, while other government institutions occupying forest land had not paid the required licence fees.
The report also points to weaknesses in cash management, saying KFS continued operating dormant bank accounts that attracted unnecessary charges.
In addition, Sh43.2 million collected through the eCitizen platform had not been remitted by the close of the financial year, while bank reconciliation differences dating back to 2014 were yet to be resolved.
The audit also faulted KFS over its human resource management, noting that one employee remained in office for seven years after attaining the mandatory retirement age.