The Affordable Housing Fund (AHF) board snubbed a House oversight committee meeting that was to scrutinise audit findings that revealed a lack of title deeds for ongoing housing projects worth Sh53.87 billion.
The board failed to appear before the National Assembly’s Special Funds Accounts Committee (SFAC), which was to deliberate on Auditor General’s findings on the Affordable Housing Fund books of accounts for the year to June 2025.
Auditor General Nancy Gathungu has flagged the ongoing projects, saying the audit established that various ownership and land tenure arrangements were employed across the developments.
She said the ownership and land tenure arrangements include parcels with registered title deeds, letters of allotment, or certificates of official land search.
Auditor-General Nancy Gathungu.
Photo credit: Wilfred Nyangaresi | Nation Media Group
Ms Gathungu said the statement of financial position reflects property, plant and equipment balances of Sh53,873,271,342, which constitutes work-in-progress.
The auditor said the amount represents the cost of constructing affordable houses and other related infrastructure development across the country.
She said the value of land has not been declared as the Fund has not procured any land but constructs houses based on vested lands by either the national government entities and county governments.
Ms Gathungu said the statement of financial position reflects inventory balances of Sh211.48 million, which comprises the already completed projects for houses held for sale for the affordable housing project at Mukuru and in Homa Bay County.
The audit report shows that 269 completed houses held for sale under affordable housing had no land documentation, 14 projects had title deeds, nine had letters of allotment, 23 projects had a certificate of search, and two were built on community land.
“A number of projects were implemented on community land or land held under customary arrangements, and this may precipitate a challenge on how the sectional title deeds will be processed without the original land ownership documents,” Ms Gathungu said.
She said the AHF board had an accounts payable balance of Sh459.41 million, which relates to funds owed to county committees which had not been remitted by the Fund since inception.
“This is contrary to Section 14(4)(c) of the Affordable Housing Fund Act, 2024 which states that despite the provisions of subsection (2), the Board shall allocate out of the Fund not less than point five percent (0.5 percent) of the monies to the county committees for the administration of the county committees as may be approved by the Cabinet Secretary for the time being responsible for the National Treasury,” Ms Gathungu said.
“ln the circumstances, management was in breach of the law.”
Migori Woman Representative Fatuma Mohammed.
Photo credit: Dennis Onsongo | Nation Media Group
The committee chaired by Migori Woman Representative Fatuma Mohammed was to grill the AHF board over failure to onboard taxpayers with affordable housing obligations.
Ms Gathungu said a review of records revealed that the Affordable Housing Fund relies solely on the proceeds submitted by the Kenya Revenue Authority (KRA), which in turn relies solely on what has been remitted by the government institutions.
“The board does not therefore have a mechanism to know what it expects based on accurate data,” Ms Gathungu said.
“Similarly, KRA does not have power through the Affordable Housing Act, 2024, to enforce compliance by employers.”
The audit report indicates that further analysis of taxpayer data from the KRA iTax system in respect of Pay As You Earn (Paye) and Housing Levy deductions revealed that 6,390 taxpayers were found in the Paye register but were missing in the Housing Levy records.
“Management explained that although the Authority (KRA) is mandated to collect Affordable Housing Levy, enforcement of the levy is not within its purview,” Ms Gathungu said.
“ln the circumstances, the Fund may have unrealised revenue from institutions that fail to deduct or conceal deducted amounts thus undermining the implementation of the Affordable Housing Policy.”
She said the Fourth Medium Term Plan 2023-2027 "Bottom-Up Economic Transformation Agenda for inclusive Growth," provides that under the Housing and Settlement Pillar, 200,000 affordable housing units will be constructed annually.
She said out of these, 60,000 units will be financed through government support while 140,000 units will be financed through the National Housing Development Fund.
Ms Gathungu said the plan further seeks to increase the number of low-cost mortgages from 30,000 to one million.
“However, review of records on current target achievements against actual performance revealed that the Fund's had underperformed on delivery of the affordable houses against set targets with only 3,61 1 units having been completed,” Ms Gathungu said.
She said that, in the circumstances, the effectiveness of the Fund's ability to deliver the target number of housing units to the public could not be confirmed.
