By Anderson Ojwang
The Office of the Controller of Budget (COB) has launched preliminary investigations into an alleged irregular mortgage agreement between the Homa Bay County Government and the County Pension Fund (CPF) for the construction of a Sh820 million county headquarters.
The move follows a complaint by a human rights organization, Interface Community Help Desk, which sought urgent intervention to halt any irregular payments related to the mortgage.
In a letter dated February 3, 2026, addressed to the organization, COB chairperson Evans Oloo Gor wrote: “The Office of the Controller of Budget is in receipt of your complaint dated 8th January concerning the subject matter. Please be assured that the office will offer a detailed response as soon as preliminary investigations are concluded.”
The letter was signed by Controller of Budget Dr. Margaret Nyakango.
Subsequently, Nyakango wrote to Homa Bay Governor Gladys Wanga on February 3, 2026, demanding a response to the allegations raised by the organization.
The organization claimed that the national government did not guarantee the Sh820 million loan, that the county assembly did not approve the borrowing, and that there was no evidence of public participation.
It further alleged that the loan was not captured in the current County Integrated Development Plan (CIDP), that only Sh420 million was allegedly approved by the County Executive Committee, and that when county officials travelled to Nairobi to sign the CPF agreement, the cost was inflated to Sh820 million without justification.
The organization termed the matter a case of fiscal mismanagement of public funds, detrimental to taxpayers and residents of Homa Bay County.
It demanded the immediate stoppage of payments or withdrawals relating to the loan and called for suspension of any further expenditure until legal compliance is confirmed.
Nyakango gave Governor Wanga seven days to respond and provide supporting documentation for the agreement.
“To enable this office to address the complaint, please respond to the allegations in the letter, attaching any supporting information or documentation by 10th February 2026 at the latest,” she wrote.
She warned that non-compliance with a request from the Controller of Budget constitutes an offence.
Last year, Principal Secretary for the National Treasury Dr. Chris K. Kiptoo stated that the national government did not issue a guarantee for the Sh820 million mortgage loan to Homa Bay County Government, in line with Articles 212(a) and 213 of the Constitution of Kenya.
In a response to Interface Community Help Desk, which had sought clarification on compliance with Article 212 of the Constitution regarding the mortgage loan, Kiptoo wrote:
“We acknowledge receipt of your letter Ref UCHD/S/VOL.4/2025 dated 3rd June 2025 on the above subject matter. In your letter, you have indicated that Homa Bay County Government secured a loan amounting to Sh820 million from the County Pension Fund for the construction of the Homa Bay County headquarters, with the project having commenced in the FY 2023/2024.”
He continued:
“Furthermore, you have requested the National Treasury to provide clarification and access to the following information: whether the national government provided a guarantee for the Sh820 million loan to the Homa Bay County Government in accordance with Article 212(a) of the Constitution of Kenya; whether the National Treasury approved the said borrowing as required under the Public Finance Management Act and related regulations; whether the Homa Bay County Assembly formally approved the borrowing and mortgage loan agreement with the County Pension Fund; and any publicly available impact assessments, feasibility studies, or risk analyses conducted prior to securing the loan.”
Kiptoo clarified:
“The National Treasury has reviewed your request and wishes to inform you that the national government has not issued a guarantee for the Sh820 million mortgage loan to Homa Bay County Government, in line with the provisions of Articles 212(a) and 213 of the Constitution of Kenya.”
He added:
“For clarification and access to information on the other issues you have raised in your letter, the National Treasury requests you to kindly seek clarification from Homa Bay County Government. The purpose of this letter, therefore, is to provide clarification on the issue of guarantee of the loan, which is the only issue that concerns the National Treasury.”
Article 212 of the Constitution of Kenya governs borrowing by county governments. It stipulates that a county government may borrow money only if the national government guarantees the loan and if the county assembly approves it.
This means county governments cannot independently secure loans without national oversight. Even where a national government guarantee exists, the county assembly must formally approve the borrowing to ensure accountability and public oversight in financial decision-making.
The ongoing investigations by the Controller of Budget are expected to determine whether the Sh820 million mortgage complied with constitutional and legal requirements.
