"Where did the money go?" Hustler Fund faces scrutiny over Sh8 billion gap

The Hustler Fund is now facing scrutiny after it emerged that Sh8 billion from the 2022/2023 budget cannot be accounted for.

Where did the money go? That’s the question facing the Hustler Fund after it emerged that Sh8 billion from the 2022/2023 budget cannot be accounted for.

The Auditor General’s report has exposed major gaps in the management of the fund, showing the State Department for Cooperatives only spent Sh12 billion from the Sh22.96 billion approved.

Appearing before the National Assembly’s Public Accounts Committee on Wednesday, Cooperatives Principal Secretary Patrick Kilemi admitted that Sh20 billion had been allocated to the Hustler Fund, but only Sh12 billion was requested and transferred.

“The State Department requested the transfer of Sh12 billion to the Hustler Fund, which was processed and transferred. However, no request was made for the remaining Ksh8 billion, hence the under-absorption,” Kilemi told the committee chaired by Butere MP Tindi Mwale.

Kilemi attributed the confusion to transitional challenges during the early stages of the Kenya Kwanza Government.

He said the State Department for MSMEs, which now oversees the Hustler Fund, was not yet fully integrated into government systems, forcing the Cooperatives Department to handle the fund temporarily.

“I was tasked to initiate the process of the Hustler Fund as the State Department for MSMEs was getting 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,” Kilemi said.

He added that the Sh8 billion “wasn’t requested through the proper channels, which is why it didn’t come through”.

Auditor General Nancy Gathungu’s report revealed the department spent Sh14 billion against a Sh22.96 billion budget, representing a 36 per cent under-absorption.

Kilemi also disclosed the department had requested over Sh282 million from the Exchequer but received only Ksh3.6 million in appropriations-in-aid by the end of the financial year.

MPs accused the PS of negligence and failing to provide leadership. Committee chair Tindi Mwale said Kilemi could not shift the blame.

“Procedurally, it is the principal secretary, not the CEO, who is mandated to request funding. You ought to have reviewed the documents and flagged the missing Sh8 billion allocated to the Hustler Fund,” he said. “You cannot pass the buck by saying the officer failed to submit a request.”

Funyula MP Wilberforce Oundo questioned whether an executive order had transferred the funds from the Cooperatives Department to the MSMEs Department.

“Where is this money, so that we understand whether someone slept on the job or if the money was so saturated in the economy that Kenyans, so-called hustlers, could not absorb such a large amount?” he asked.

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Aldai MP Marianne Kitany accused Kilemi of gross negligence.

“Chair, the PS has already admitted that he was holding the vote for this particular fund and acting on their behalf. If that is the case, then it was his responsibility to ensure that the fund received the necessary budgetary allocation,” she said. “Why didn’t he take action? Why is he quoting someone else who isn’t here to defend themselves?”

Kilemi was given two weeks to provide documents explaining the Sh8 billion gap in the Hustler Fund budget.