The State’s e-Citizen payment platform.
A parliamentary probe into the unauthorised diversion of Sh6.3 billion in eCitizen revenue to an account at Equity Bank has stalled despite initial demands by MPs for accountability following Auditor-General Nancy Gathungu’s exposé.
The inquiry went quiet after the members of the National Assembly Committee on Public Accounts (PAC) backtracked on it.
Ms Gathungu’s special audit flagged the irregular diversion.
Notices sent to members of PAC, chaired by Butere MP Tindi Mwale, had scheduled a meeting on May 5, 2026, with the service providers of eCitizen, a government digital payments platform.
Chairperson of the National Assembly Public Accounts Committee Tindi Mwale during proceedings at County Hall, Nairobi, on March 25, 2026.
They included the CEO of Electronic Citizen Solutions, Director of Pesaflow Limited, CEO of Webmasters Kenya Limited, Director of Olive Tree Media Limited and Director of Goldrock Limited, regarding the special audit report on the government digital payments platform.
A day later, the committee was scheduled to meet the Managing Director of Equity Bank on the same matter, but Mr Mwale postponed the meetings, which may have irked some committee members.
“Hon Members, this is to inform you that the firms/witnesses invited to appear before the committee regarding the Special Audit on the Government Digital Payments Platform (eCitizen) have requested more time to prepare their submissions,” a message from the PAC secretariat to members read.
“In this regard, the meetings scheduled for this week are postponed. The next meeting will be held on Tuesday, 12th May 2026,” the members were further guided.
To date, the committee is yet to sit and listed from the witnesses, more than a month down the line since they were first invited to the committee.
Intriguingly, the request by the witnesses’ request for more time came after reports of a secret meeting with a section of the committee members for “coaching.”
Notably, a section of the committee members, who did not want to go on record, were surprised at the reason given for the postponement of the meeting, which they described as curious.
“Why would they require more time to prepare their submissions, yet they had already submitted before the committee?” posed a member of the committee, in what may constitute abuse of parliamentary privileges.
This, as another PAC member wondered, “could it be that they were taken through the issues, hence the request for more time?”
The Daily Nation has been following the matter and specifically the MPs’ cold feet on a matter that affects the country’s revenue and recently Mr Mwale ruled out any possibility that the committee had been compromised to slow down the probe.
“Those are rumours. Ignore them,” said Mr Mwale. However, on Tuesday he did not respond when we sought clarification on the fate of the probe. The audit covered the financial years 2021/22, 2022/23 and 2023/24.
“The committee invites the above people so that they can come and give their side of the story, especially on licensing agreements, approvals of payment, withholding of money and diversion of funds,” Mr Mwale had said during the PAC meeting on March 25, 20026.
The special audit revealed that an account in the name of Pesaflow was opened at Equity Bank, into which proceeds from eCitizen, a government digital revenue collection platform, were “irregularly deposited.”
Webmasters had initially been engaged to provide Software Development and Maintenance Support Services on the eCitizen platform, but later brought in Pesa Flow Limited and Olive Tree Media to offer support and maintenance services.
At a previous PAC meeting, National Treasury Principal Secretary Dr Chris Kiptoo disclosed that the account was opened without his authority, and when he got wind of it, “I froze it.”
“When the matter came to the attention of the National Treasury, a letter was written to Equity Bank Limited requesting details of the agency accounts and giving instructions to freeze them. The accounts were frozen, and the funds in those accounts were withheld,” Dr Kiptoo said.
The overall objective of the special audit was to assess measures put in place in the government digital payments platform to enhance revenue collection by Ministries, Departments and Agencies (MDAs) and counties.
Irregular payments
The audit involved a review of processes at the GDP unit, the Directorate of eCitizen services, ICT Authority and MDAs, analysis of data maintained by the eCitizen platform and review of the impact of onboarding on revenue collection and service delivery by MDAs.
It also involved walk-through tests of payments, document review, data analysis and interviews with key staff.
The audit shows that at the time of the audit, the Pesaflow account had receipts amounting to Sh68,719,877 and USD48,142,844, about Sh6.24 billion.
The audit shows that in the 2020/21 financial year, Sh7.84 million and USD5.86 million got deposited in the account. In the 2021/22 period, Sh60.88 million and USD29.73 million got banked in the Pesaflow account.
In the 2022/23 fiscal year, no Kenyan currency was banked in the account, but USD12.6 million got deposited compared to the 2023/24 period, which did not record any deposits.
The audit reveals that when the auditors requested the bank statements of the Pesaflow, the management of the Equity Bank did not provide them, raising questions over whether the money was retained in the account or withdrawn immediately after the deposits were made.
The bank’s failure to provide the statements of the account also means that the auditors could not tell who the beneficiaries of the withdrawn money were.
“This account was not listed among the approved collection accounts by the National Treasury. In this regard, it was used to irregularly collect money,” reveals the audit.
The audit further reveals that “the total amount irregularly collected using the 'Pesaflow' account was not established as the bank statement for this account was not provided for audit.”
Sections 75 and 76 of the Public Finance Management (PFM) Act give the Cabinet Secretary for National Treasury and Economic Planning the mandate to appoint receivers of Revenue.
The law further states that the receivers of revenue may appoint collectors of revenue to collect revenue on behalf of and remit it within three days.
Further, Executive Order No.2 of 2023 established the government digital payment unit as one of the institutions under the National Treasury, mandated to manage the revenue collected under the eCitizen platform.
Other than the unauthorized diversion of public funds, the audit exposes irregularities and weaknesses that include irregular payments of the eCitizen platform support and maintenance contract, unaccounted receipts in statement accounts, unauthorized transfers from Mpesa Paybill no.222222.
The audit reveals that all collections paid using Paybill 222222 were expected to be auto-transferred to the settlement account held at KCB Bank.
But according to the audit, review of the 222222 Paybill statements revealed that on January 25, 2024, there were four transactions worth Sh127.9 million made from the Paybill account to private entities instead of the designated settlement account.
“No documentation was provided to support these transfers of money directly from the Paybill to the private entities,” the audit reads, adding that it was contrary to Article 201 of the constitution on public finance that requires public funds to be used prudently and responsibly.
Auditor-General Nancy Gathungu.
The idea to digitize revenue collection in Kenya was an initiative of the government of Kenya.
The development was financed by the World Bank through its International Finance Corporation (IFC) intermediary, which contracted Webmasters Kenya Limited to provide software development and maintenance support services.
In 2017, the IFC handed over instruments, including contracts, source code, business case and handover notes to the National Treasury.
This saw the government officially take over the possession and ownership of the platform in August 2017.
However, it was established that on January 13, 2023, the Ministry of Information Communications and Digital Economy and Webmasters Kenya Limited entered into a handover agreement where Webmasters, being the vendor of the e-citizen platform, agreed to unconditionally hand over the platform to the government.
“It was not explained how the ownership and control of the e-citizen platform ended up back in the hands of the vendor after having already been handed over to the National Treasury by OIFC in 2017,” the audit reads.
This, even as the audit accused the National Treasury of failing to provide “some key documents and information required for the audit.”
“This limitation primarily impacted the assessment of the adequacy and effectiveness of IT controls designed to protect information assets,” the audit reads.
It was also established that despite the transfer of ownership by Webmasters Kenya Limited in January 2023, the government did not obtain full control of the systems, “resulting in continued over-reliance on the vendor.”
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