NAIROBI, Kenya Apr 16 – Petitioners challenging the handling of Kenya’s 2013/2014 Eurobond have dismissed the Auditor-General’s defence, arguing that it effectively acknowledges constitutional violations while attempting to avoid responsibility.
They contend that the Auditor-General’s own audit findings support their case, particularly the admission that Eurobond proceeds were deposited in offshore accounts instead of being remitted to the Consolidated Fund, which they argue contravenes Article 206 of the Constitution and provisions of the Public Finance Management Act.
The petitioners insist that all public debt, regardless of where it is held, is subject to full audit oversight and cannot be excluded on jurisdictional grounds.
They further fault the Auditor-General for not explicitly declaring the Eurobond funds unlawfully applied, despite noting that the monies did not pass through the Consolidated Fund as required by law.
According to them, Article 229(6) of the Constitution places a mandatory obligation on the Auditor-General to confirm the legality of public expenditure, and this duty cannot be limited by technical accounting interpretations or administrative discretion.
The group argues that audit reports focused narrowly on accounting discrepancies while avoiding the central constitutional question—whether the Eurobond funds were lawfully appropriated and spent.
They also criticize the continued deferral of unresolved audit issues across financial years, saying constitutional timelines require audits to be completed conclusively within defined periods, rather than being carried forward indefinitely under “ongoing investigations.”
At the centre of their argument is the Auditor-General’s Special Audit Report of April 2019, which they say strengthens their position rather than weakens it.
The report confirmed that billions from the Eurobond were deposited in offshore accounts in New York rather than the Consolidated Fund. It also noted that the use of the funds could not be directly traced to specific development projects, with the National Treasury describing the proceeds as “fungible.”
The petitioners argue that this undermines the government’s position that the Eurobond financed identifiable projects and supports their claim that parliamentary appropriation requirements were not followed.
They further raise concerns over transparency in public finance management, citing instances where some expenditures—including those linked to security agencies—were processed outside the Integrated Financial Management Information System (IFMIS).
They also question the classification of certain expenditures as Appropriation-in-Aid, arguing that such practices suggest parallel financial processes operating outside standard oversight mechanisms.
Despite these findings, the petitioners accuse the Auditor-General of failing to take decisive action, including declaring the expenditure unlawful or initiating accountability measures following the special audit.
The petitioners have rejected arguments for judicial restraint, insisting that the High Court has full constitutional authority to interpret state conduct and determine legality.
They argue that neither ongoing audits nor previous forensic reviews can substitute judicial determination of constitutional compliance.
They are urging the court to make a definitive ruling on alleged breaches of public finance law, parliamentary appropriation rules, and constitutional provisions governing public debt management.