Nairobi, May 3 -- Auditor-General Nancy Gathungu has revealed that the National Treasury's move to divert Sh30 billion in Eurobond proceeds to cover up for the massive Treasury Bond shortfalls is a violation of the law, raising doubts about the effectiveness of the utilization of the funds.

This came as it emerged that the government failed to service five outstanding bilateral loans for security contracts worth Sh15.42 billion as of June 30, 2025, denting the country's credit worthiness.

Ms Gathungu, in her latest audit on the accounts of the National Treasury before parliament, revealed that she could not establish whether the proceeds used to clear the Treasury Bonds were reimbursed after receipt from the external resources.

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