When fraud is suspected or a donor asks questions.
- Forensic investigations into fraud, theft and misuse of donor funds
- Whistleblowing case handling
- Asset tracing and digital evidence
- Reports donors accept, ending in a costed remediation roadmap
NGOs and donor-funded programmes
Audit, fraud and compliance for NGOs in Kenya
FNJ & Associates is an ICPAK-registered audit firm for NGOs in Kenya. We help local and international NGOs, public benefit organisations and donor-funded programmes protect donor money: we audit projects and accounts, investigate fraud, put controls in place to prevent it, and keep you compliant with the PBO Regulatory Authority, KRA and your donors.
Investigate. Prevent. Prove.
ICPAK-registered CPA firmCPA, CFE, CIA, CAMSWhistleblowing hotline in English and SwahiliNairobi, serving East Africa
Why now
Less funding, more scrutiny
More funding now goes directly to Kenyan organisations, and each must pass donor due diligence on financial controls, anti-fraud policy, whistleblowing and safeguarding. Smaller teams also weaken segregation of duties, which raises fraud risk.
Sh108bn
in USAID contracts and grants in Kenya had been terminated by March 2025, and other Western donors have also cut back.
Source: Business Daily, March 202582%
fall in expatriate staff at NGOs and charities in Kenya over five years, from 5,040 in 2020/21 to 924 in 2024/25.
Source: Business Daily, April 2026FATF
Risk-based oversight of non-profits is one of the actions Kenya must complete to leave the FATF grey list, and PBORA is now the AML/CFT supervisor for PBOs.
Source: FATF, June 2026Project audits
Donor-funded project audits
We audit grants and projects to your donor's terms of reference and reporting format, under International Standards on Auditing and the International Standard on Related Services for agreed-upon procedures.
Project and grant audits
Audits of project financial statements and fund accountability statements prepared under the donor's framework.
Agreed-upon procedures
Factual findings on the procedures your donor specifies, including EU expenditure verification.
Grant close-out audits
Final expenditure, asset disposal and unspent balance checks when a grant ends.
Statutory audits
Annual audits of the organisation's financial statements for filing with PBORA and for donors.
What a project audit checks
- Costs are eligible under the grant agreement and the donor's rules
- Spending matches the approved budget, with variances explained
- Procurement followed the required thresholds and quotations
- Payroll, per diems and allowances are supported and approved
- Advances, cost allocations and exchange rates are handled correctly
- Assets bought with grant funds are recorded and safeguarded
What you receive
- An audit opinion or factual findings report in your donor's format
- A management letter with findings graded by risk
- Agreed actions and owners, so findings are closed before the next audit
- Fieldwork planned around your programme calendar and reporting deadline
Fraud and controls
Investigate, prevent and prove
Controls that stop the next loss.
- Fraud risk assessments
- Anti-fraud, whistleblowing and safeguarding policies
- Trigarc Ethics hotline: anonymous, independent, in English and Swahili
- Staff and board training
Evidence for donors, boards and the regulator.
- Project, grant and statutory audits
- Agreed-upon procedures and expenditure verification
- Follow-up reviews 6 to 12 months after an investigation
- PBO filings and a compliance health check
Our independence rule. Where we run your whistleblowing hotline or designed your controls, we do not audit your projects in those areas. We choose each client's route deliberately: advisory and Trigarc for some, audit for others.
Registration, tax and compliance
Stay registered, tax compliant and in good standing
One team for your PBORA, KRA and AML/CFT obligations, so filings are on time and your records are ready when a donor asks.
Registration and PBO compliance
- New PBO registration and constitutions
- Record updates on eCitizen for former NGOs before 14 May 2027
- Board composition and governance reviews
- Annual reports and audited accounts filed on time
Tax compliance
- Income tax exemption applications and renewals
- PAYE and statutory deductions: SHIF, NSSF and Housing Levy
- Withholding tax on consultants, rent and other payments
- VAT and eTIMS where your activities require them
Regulatory compliance
- Terrorism financing risk assessments and partner vetting
- AML/CFT policies for PBORA supervision
- ODPC registration and data protection for beneficiary data
- A compliance calendar for PBORA, KRA and donor deadlines
Donor due diligence
What do donors check before funding a local NGO?
Donor due diligence has tightened as more funding goes directly to Kenyan organisations. These are the documents and controls donors most often ask to see. We review each one and help you close the gaps before the assessment.
See the Donor Readiness Pack- 1Audited financial statements for recent years
- 2A financial management manual covering approvals, procurement and cash
- 3An anti-fraud and anti-corruption policy
- 4A whistleblowing channel staff and communities can use safely
- 5A safeguarding policy and reporting procedure
- 6A procurement policy with conflict of interest declarations
- 7Board composition and governance records
- 8PBO registration certificate, filed annual returns and a KRA tax compliance certificate
- 9Evidence that past audit findings were fixed
For local NGOs
The Donor Readiness Pack
One annual package for local NGOs receiving direct funding, sized for small teams. It covers the controls donors look for first.
Trigarc Ethics hotline
Anonymous and independent reporting in English and Swahili, covering fraud and safeguarding.
Anti-fraud policy
Written for your organisation and approved by your board.
Safeguarding reporting procedure
Who reports what, to whom and how fast, linked to the hotline.
Fraud risk assessment
Your main fraud risks ranked, with the controls that address them.
Priced as one annual fee. Also available: Trigarc Compliance as a donor compliance tracker for grant conditions, reporting deadlines, audit findings and PBO filings, priced per grant. We can help you include audit, whistleblowing and compliance costs in donor proposals as budget lines.
Ask about the Donor Readiness PackFor international NGOs
Assurance over the partners you fund
One firm for your whole Kenyan partner panel, working to your donor's terms of reference and your reporting format.
Request a proposalPre-award assessments
Capacity and risk assessments of local partners before you sign.
Spot checks and partner audits
Planned across your partner panel through the year.
Expenditure verification
Agreed-upon procedures and EU expenditure verification to your donor's rules.
Our work
Engagements we deliver for NGOs
Forensic
Donor-triggered fraud investigations
Investigations into misuse of grant funds, reported in a form donors can act on.
Whistleblowing
Hotlines and case handling
Independent reporting channels for staff and communities, with cases handled to closure.
Assurance
Project and statutory audits
Grant audits, agreed-upon procedures and annual audits for PBORA filing.
Compliance
PBO transition and tax
Record updates, governance reviews, annual returns and KRA compliance.
We do not publish client names. References from organisations in your sector are available on request, including for tenders and donor prequalification.
Free resources
Templates and guides for NGO finance teams
FAQ
Questions NGOs ask us
What are the audit requirements for NGOs under the PBO Regulations 2026?
The Public Benefit Organizations Regulations, 2026 (Legal Notice No. 43, published 18 March 2026) require PBOs to file annual reports, with audited accounts, within six months of their financial year-end, to disclose their sources of funding, and to have at least one third of directors who are Kenyan and resident in Kenya. Donors usually add their own audit requirements in the grant agreement.
When must former NGOs complete the transition to the PBO Act?
By 14 May 2027, after Legal Notice No. 85 of 2026 extended the transition period. PBORA advised in May 2026 that the transition is automatic and no re-registration is needed, but former NGOs must update their records on eCitizen, after which PBORA issues a new certificate free of charge.
What does a donor-funded project audit cover?
It checks that grant funds were spent on eligible costs, in line with the budget, the grant agreement and the donor's rules, and that procurement, payroll and supporting documents hold up. Depending on the donor it is an audit of project financial statements, an agreed-upon procedures engagement or an expenditure verification.
Do NGOs in Kenya pay tax?
An NGO can apply to KRA for income tax exemption on its charitable income, but exemption does not remove its other obligations. It must still deduct and remit PAYE, SHIF, NSSF and the Housing Levy for staff, withhold tax on qualifying payments to suppliers and consultants, and file its returns on time.
Who supervises NGOs for anti-money laundering?
The PBO Regulatory Authority. The Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act, 2025 made PBORA the AML/CFT supervisor for PBOs, and risk-based oversight of non-profits is one of the actions on Kenya's FATF plan.
Can the same firm audit us and run our whistleblowing hotline?
Not for the same areas. Where FNJ runs an NGO's hotline or designed its controls, we do not audit its projects in those areas, so donors can rely on our independence.
How long does a proposal take?
We reply within one working day and send a proposal with scope, team and fees within 1 to 4 working days.
Protect your donor money
Tell us your donor, your reporting deadline or your concern. We reply within one working day, and conversations about suspected fraud stay confidential.