Auditor General reveals Ksh.8 billion in Hustler Fund can't be accounted for

Controversy continues to surround President William Ruto’s flagship financial inclusion initiative, famously known as the Hustler Fund, after it emerged that the State Department for Cooperatives Development cannot account for Ksh.8 billion in the financial year ending June 2023.

According to the Auditor General’s report for that period, the State Department spent Ksh.12 billion against an approved budget of Ksh.22.96 billion, resulting in Ksh.8.2 billion that the department cannot account for.

Appearing before the National Assembly’s Public Accounts Committee, Principal Secretary for the State Department for Cooperatives, Patrick Kilemi, struggled to explain the whereabouts of the missing funds, even as he acknowledged that Ksh.20 billion had indeed been allocated to the Hustler Fund for that financial year.

“The State Department requested the transfer of Ksh.12 billion to the Hustler Fund, which was processed and transferred. However, no request was made for the remaining Ksh.8 billion, hence the under-absorption,” Mr. Kilemi told the committee, chaired by Butere MP Tindi Mwale.

However, his explanation raised several questions from committee members. Funyula MP Wilberforce Oundo questioned the transfer and utilization of the Ksh.8 billion allocated to the Hustler Fund and whether due process was followed in reallocating the funds.

"I'm just wondering—was there an executive order that transferred the money from the State Department of Cooperatives to the State Department for SMEs, or whatever it is called—the Hustler Fund? And when was that executive order issued?" Oundo asked.

“Where is this money? We need to understand whether someone was negligent or if the economy was so saturated that Kenyans—the so-called hustlers—could not absorb such a large amount,” he added.

PS Kilemi admitted that he could not fully account for the missing Ksh.8 billion, citing transitional challenges within government departments during the early days of the Kenya Kwanza administration.

He explained that, at the time the new administration came into office, the State Department for Micro, Small, and Medium Enterprises (MSMEs) had not yet been fully integrated into government financial systems. As a result, the responsibility of initiating the Hustler Fund was temporarily assigned to the State Department for Cooperatives, which he headed.

“I was tasked with initiating the Hustler Fund as the State Department for MSMEs was being established. That’s why I received the funds on behalf of that department and now find myself responding to questions about what transpired at the time,” he said.

Committee Chairperson Tindi Mwale faulted the PS for failing to account for the Ksh.8 billion meant for the Hustler Fund, accusing him of negligence and potential involvement in the misappropriation of public funds.

“Procedurally, it is the Principal Secretary—not the CEO—who is mandated to request funding,” Mwale said. “You ought to have reviewed the documents and flagged the missing Ksh.8 billion allocated to the Hustler Fund.”

“You cannot pass the buck by saying an officer failed to submit a request. Once the documentation reaches your office, it is your responsibility to sign off on it before it goes to the Treasury,” he added.

The PS was given two weeks to provide all documentation explaining the gaps in the Hustler Fund’s expenditure.