A fresh audit has laid bare deep challenges at the Kenya Rural Roads Authority (KeRRA), revealing that dozens of road projects worth more than Sh69.4 billion have stalled as contractors wait for payment and financial gaps continue to emerge.
The findings also point to growing pressure on the authority, with auditors warning that the delays, pending bills and shortage of staff could affect delivery of road projects across the country.
The Auditor General's report for the financial year ended June 30, 2025 paints a worrying picture of the state agency's operations, highlighting delayed projects, unpaid contractors, inconsistencies in financial records and governance weaknesses.
Despite managing billions of shillings in road infrastructure, the authority is facing questions over accountability and the pace of project implementation.
The audit shows that KeRRA had 136 road projects under implementation during the period under review. However, two of the projects had not started even though they had been listed as ongoing.
In addition, 43 projects with a combined contract value of Sh69.4 billion had fallen behind schedule. The projects were launched between April 2020 and October 2022.
KeRRA attributed the delays to late payments to contractors. According to the report, contractors had completed certified works worth Sh1.16 billion but had received only Sh469.7 million, leaving unpaid certificates amounting to Sh693.9 million.
The report also found that contractors who completed 47 performance-based routine road maintenance contracts were yet to receive full payment. Although the contracts had reached 100 per cent completion, the authority still owed the contractors Sh13.19 billion, exposing KeRRA to possible interest charges while increasing concerns over the growing backlog of pending bills.
“The value for money already incurred on incomplete projects could not be confirmed,” the Auditor General says.
Auditors also questioned figures reported under the fuel securitisation programme administered by the Kenya Roads Board. While KeRRA indicated it had received Sh27 billion from the programme, records held by the Kenya Roads Board showed that Sh27.53 billion had been released, leaving an unexplained difference of Sh523.3 million.
Further scrutiny showed that the authority did not provide supporting documents to demonstrate how pending bills earmarked for settlement through the securitisation facility had been identified and paid. As a result, auditors said they could not verify whether the balances reported were complete and accurate.
The report also identified concerns over receivables amounting to Sh1.22 billion after auditors established that a credit balance of Sh13.5 million had been offset against debtors contrary to international accounting standards.
KeRRA's pending bills stood at Sh60.58 billion during the year under review. Although this was lower than the previous year's Sh77.58 billion, the Auditor General warned that delayed settlement of pending bills puts pressure on future budgets because the debts must be settled before new spending commitments.
The audit further highlights outstanding receivables worth Sh19.6 billion, some of which have remained unpaid for more than three years. Auditors noted that the authority had not developed a credit policy to guide debt recovery, making it difficult to determine whether the amounts would eventually be collected.
The report also found that KeRRA failed to comply with public service human resource rules after paying some employees net salaries below one-third of their basic pay, contrary to the Public Service Commission Human Resource Policies and Procedures Manual. Employee costs during the financial year amounted to Sh2.84 billion.
Beyond the financial concerns, the audit points to a major staffing gap within the authority. Out of an approved establishment of 1,209 employees, only 519 positions had been filled by June 30, 2025, leaving a shortage of 690 staff members. The Auditor General warned that the staffing deficit could place excessive pressure on existing employees and affect the authority's ability to deliver road projects efficiently.
The report also notes that several matters raised in the previous financial year's audit remain unresolved. They include inaccurate property records, long-outstanding payables, underuse of the enterprise resource planning system, delayed road projects and failure to comply with salary regulations.