Audit Report Uncovers Lapses in CBK’s Procurement Process for Currency Printing Contract.
The Central Bank of Kenya (CBK) is facing public and institutional criticism after an internal audit revealed several flaws in the way it handled a Ksh14.5 billion currency printing deal with a foreign company.
The deal, which was processed through a special classified procurement channel, has raised eyebrows over whether the legal procedures were properly followed and if there was sufficient oversight in place.
According to a detailed report by the Auditor General, CBK signed the contract on April 22, 2024, using the classified procurement method, as permitted under Section 90 of the Public Procurement and Asset Disposal Act of 2015.
The bank had earlier received the necessary approval from the Treasury Cabinet Secretary back in January 2024.
However, despite having this clearance, the audit uncovered that CBK failed to comply with several essential rules listed under Regulation 84 of the Public Procurement and Asset Disposal Regulations, 2020.
For instance, CBK did not carry out thorough identification and assessment of potential suppliers before awarding the contract to the unnamed foreign firm.
Additionally, CBK did not form a special procurement committee to oversee the process, which is a mandatory requirement for purchasing classified goods and services.
The audit also noted that the Director-General of the Public Procurement Regulatory Authority (PPRA) was not involved in monitoring the process as required by Section 9(1)(d) of the Act.
In its findings, the audit stated,
“The review of the procurement process showed that CBK did not follow internal procedures before launching the procurement. It failed to identify and assess qualified suppliers, and also did not form the required committee to manage the classified procurement.”
The report continued,
“Further, there was no oversight from the Director-General of PPRA, which is a legal obligation under Section 9(1)(d) and Regulation 84.”
Despite these procurement shortcomings, the Auditor General noted that CBK’s overall internal controls, risk management practices, and governance systems were found to be generally effective.
The audit was conducted using international auditing standards (ISSAI 4000 and others) and found no widespread governance issues, suggesting that the problem was specific to this procurement process rather than a reflection of institutional failure.
The audit was carried out to determine whether CBK’s financial activities and legal compliance were in line with the expectations outlined in the Public Audit Act, 2015, and other international auditing standards (ISSAI 2315 and 2330).
Although the CBK’s systems passed most of the checks, this high-value contract exposed gaps in how procurement regulations were applied.
So far, CBK officials have not issued a formal response to the audit findings. However, pressure is mounting on the Treasury and PPRA to explain why the contract was allowed to proceed despite these major procedural flaws—even after Treasury clearance had been given.
Earlier in August 2024, CBK Governor Dr. Kamau Thugge had acknowledged during a press briefing that the government had partnered with a German firm to print the country’s currency. However, he did not disclose the name of the company.
“The printing is being done by a German firm, and it is actually one of the best in the world,” said Governor Thugge.
Meanwhile, on June 2, anti-corruption activist Nelson Amenya—who is well known for uncovering the controversial Adani-JKIA deal—came forward with allegations that the government had secretly redesigned the country’s currency just months after introducing enhanced security features.
Amenya claimed that the new currency was already being mass-produced in Germany without the knowledge or approval of the Kenyan public. This revelation has fueled further concern over transparency and accountability in the CBK’s handling of currency matters.
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