Millions sink into stalled governors' residences despite SRC's deadline that lapsed 4 years ago

Auditor-General Nancy Gathungu calls for more fundings when she appeared before the Senate's Cohesion , Equal Opportunity and Regional Integration committee. [Elvis Ogina, Standard]

Counties continue to spend millions of shillings on official residences for governors and their deputies, even as several projects remain incomplete, abandoned or stalled years after the Salaries and Remuneration Commission (SRC) set a deadline for leasing.

Some residences have stalled because of non-payment of contractors, others because of land disputes, while several have been abandoned after contractors received substantial payments.

In other cases, counties have entered into contracts whose values significantly exceed the ceilings set by SRC.

SRC first provided guidelines on the housing benefit in a Gazette Notice dated March 1, 2013, advising that official residences should be provided for the President, Chief Justice, governors and speakers of national and county assemblies.

In 2015, the commission set limits for rental payments for official residences, including a maximum of Sh150,000 per month in Nairobi, Mombasa and Kisumu and Sh75,000 in other counties for county assembly  speakers.

In a circular dated May 20, 2019, SRC extended the deadline for counties to implement the housing benefit to June 30, 2022, giving counties time to allocate funds and prioritise construction on public land.

The commission reiterated the deadline in another circular dated August 14, 2020.

“Subsequently, the Commission reiterates that the June 30, 2022 deadline for leasing of houses still applies. The Counties are, therefore, reminded to hasten the construction of the houses by allocating funds and prioritising the construction,” read the circular in part.

The commission’s guidelines provided that governors, deputy governors and county assembly speakers should be housed in official residences rather than receive the benefit as a house allowance.

SRC further capped the construction cost at Sh45 million for a governor’s residence, Sh40 million for a deputy governor’s residence and Sh35 million for a county assembly speaker’s residence.

Yet audit findings show that several counties have awarded contracts above these ceilings, while others have struggled to complete projects despite substantial payments to contractors.

The 2024/2025 audit findings paint a picture of public money tied up in projects that have failed to meet their completion dates.

In Turkana, construction of the governor’s residence has been stalled for years.

A new contract was awarded on April 24, 2019 at a cost of Sh90.56 million, with the project initially scheduled for completion in May 2020.

The contract was later extended, with the revised completion period running into October 2021.

By June 2025, however, the project was only 25 per cent complete.

The Auditor-General said works certified amounted to Sh17.92 million, while payments totalling Sh14.56 million had been made through two interim payment certificates.

A physical inspection in June 2025 found the contractor on site, but no work was ongoing. The contractor attributed the stalled project to non-payment of progress certificates and indicated that legal action against the county was being considered.

The audit found that the county had not provided a satisfactory explanation for the failure to pay for certified works, exposing it to possible penalties and litigation costs.

In West Pokot, the County Executive awarded two contracts to the same local contractor for a Governor’s Office Complex.

The first phase, awarded in June 2019, was valued at Sh198.48 million, while a second phase awarded in April 2024 was worth Sh20 million.

The county subsequently changed the design from an initial six-storey building to a four-storey structure.

However, the revised architectural plans, bills of quantities, project implementation committee minutes and approvals for the changes were not made available to auditors.

The project was incomplete and had stalled, with the contractor no longer on site.

The Auditor-General said value for money on expenditure incurred could not be confirmed.

Uasin Gishu also awarded contracts that substantially exceeded the limits set by SRC.

A contract for the Governor’s residence was signed in July 2023 at Sh91.89 million, more than twice the Sh45 million ceiling prescribed by SRC.

The project had not started because of a land dispute that was before the courts.

The county was therefore found to be in breach of the SRC circular.

The Deputy Governor’s residence was also contracted at Sh62.15 million against the SRC ceiling of Sh40 million.

By May 2025, Sh44.67 million, about 72 per cent of the contract sum, had been paid.

Physical verification found that the substructure and superstructure had been completed, while finishing works, including doors, electrical, mechanical and plastering works, were at various stages.

Auditors, however, noted that the title deed for the land had not been provided for verification and concluded that value for money for the Sh44.67 million paid could not be confirmed.

In Baringo, the county had failed to construct or prioritise construction of official residences for both the Governor and Deputy Governor.

The failure was found to be in breach of SRC circulars that set June 30, 2022 as the deadline for the implementation of the housing benefit. The audit revealed that the county management was in breach of the law.

“The County Executive failed to construct or prioritize the construction of the Governor’s or Deputy Governor’s official residences in breach of the Salaries and Remuneration Commission circulars referenced SRC/TS/CGOVT/3/61/VOL.V(44), SRC/TS/CGOVT/3/61/VOL. V (52) and SRC/ADM/11 setting the deadline for leasing and paying of rent for official residences for the two (2) public officers as 30 June, 2022. In the circumstances, Management was in breach of the law,” read the report in part.

Laikipia had similarly not constructed, or made budgetary provision for, official residences for the Governor and Deputy Governor.

Instead, the Auditor-General found that the two officials continued to receive a combined Sh300,000 monthly house allowance, amounting to Sh3.6 million a year.

The payments were found to be irregular and contrary to SRC guidelines.

In Bomet, the county awarded a contract for construction of the Governor’s residence in January 2019 for Sh78.01 million, well above the SRC ceiling of Sh45 million.

The original contractor received Sh35.42 million, representing 45 per cent of the contract amount, before abandoning the site.

The contract was formally terminated in April 2024.

The county subsequently awarded a new contract worth Sh41.64 million in December 2024 to complete the project.

By June 2025, Sh20.64 million had been paid under the new contract.

The Auditor-General’s inspection in September 2025 found that the residence was still incomplete, with works including the powerhouse, gatehouse, sanitary facilities, drainage, electrical and mechanical systems, solar and water systems, and internal and external finishes yet to be completed.

Payments under the two contracts amounted to about Sh56.06 million, but the audit warned that value for money may not have been realised.

Bungoma awarded a Sh40.12 million contract for construction of the Governor’s residence in June 2023.

The project was scheduled to be completed in August 2024.

By July 2025, however, the residence remained incomplete. The latest project status report indicated 55 per cent completion, with only minimal work ongoing.

The county had paid Sh17.47 million to the contractor during the year under review.

The Deputy Governor’s residence was in an even worse state.

The county awarded a Sh35.98 million contract in June 2023, also with an expected completion date of August 2024.

When auditors inspected the site on July 15, 2025, only site clearance, excavation of foundation trenches and hoarding had been completed.

No work was ongoing and the contractor had abandoned the site.

In Nairobi, the proposed Governor’s residence at Lady Northey stands out for its size and cost.

The project was awarded for Sh235.32 million, more than five times the Sh45 million ceiling set by SRC for a governor’s official residence.

The contract provided for completion within 40 weeks from April 22, 2024.

By June 30, 2025, however, only two interim payment certificates had been raised and paid, totalling Sh89.47 million.

The remaining Sh145.85 million of the contract sum was uncertified, while the project remained incomplete.

The Auditor-General also raised concerns over the project’s management, including Sh17 million in payments made without supporting documentation, the expiry of the performance security before completion, failure to remit retention funds and withholding taxes, and inability to verify ownership of the Lady Northey site.

Provisional sums and prime costs amounting to Sh97.5 million, about 41 per cent of the contract, were also described as abnormally high.