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Why the inaction in Audit and Implementation Reports?

Audit reports are produced by the Office of the Auditor General. We can say the office is headed by the “supreme auditor”. It is a requirement for all public firms to be audited by auditing firms.

On the same measure, the auditor general audits government departments and agencies.

These departments are mandated to deliver goods and services through spending taxpayers’ money. There is need to find out whether the money was spent prudently. That is where the auditor general comes in.

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Reporting frequency          

The auditor general is expected to submit reports to the national assembly every quarter. There is also semi-annual and annual reporting.

Who watches the watchman?

The auditor general is audited by a firm contracted by the national assembly to look into the expenditure books. Recently, Kenya’s auditor general was under fire for misuse of office and misappropriation of funds.

The petitioner for ousting of the auditor general had reported to Parliamentary Audit Committee (PAC) that the AG had allowed office cars to be used by family members, purchased an office in Mombasa which remained unused and spent Ksh. 1 million in airtime.

The auditor general is never beyond reproach but the truth must prevail.

In Kenya there are a number of international auditing firms that can watch the watchman. These are KPMG and Price Water Coopers. Therefore, as the office of auditor general scrutinizes books for ministries and departments, the auditor has his back covered too.

Are counties required to produce audit reports?

Yes. All counties are supposed to have in place an internal audit unit. The role of this department is to carry out internal audit.

Source of Implementation Reports

There are two main sources of implementation reports. The first one is the Office of Controller of Budget under the stewardship of Mrs. Agnes Odhiambo.

This madam is in charge of monitoring budget absorption by Ministries, Departments and Agencies (MDAs). She also has another important role. That is, approving withdrawal of funds from the Consolidated Fund (at the national level) or County Revenue Fund (CRF) at the sub-national level.

When are the implementation reports produced?

The implementation reports are produced every quarter. That is every three months. These reports show us how government spending units are performing in budget implementation and oversight.

Why lack of interest?

The implementation and auditing reports are not in high demand because no one takes any action on the report findings. This is a toothless dog.  

Who wants to engage with reports that are taking us nowhere? For instance, the audit reports show us that there is misuse of funds but no one is prosecuted. Why then should I spend my valuable time reading or analyzing those harmless reports?

Currently, auditing MDAs is a thankless job that lacks goodwill from the executive. For instance when Edward Ouko (read: auditor general) expressed his desire to pursue the euro-bond saga all the way to New York, he met criticism from the president.

Recommended actions

  1. Those implicated by the reports for misuse of public funds should be prosecuted.
  2. The reports should be released in or on timely manner for them to remain relevant. This will enable stakeholders to tackle the issues while they are still relevant.
  3. Counties should be punished for not submitting their implementation reports. For instance, if the deadline passes before the reports are submitted the county should be denied any further release of funds.
  4. All counties should be required by law to upload their implementation reports on the websites to promote access to information.
  5. The executive arm of government should provide goodwill needed to pursue misuse of public funds.

Those are just a few of my recommendations. Tomorrow (23rd March, 2017) I will be participating in a forum where we will find ways of triggering demand and supply of these important reports. I guess this blog will receive more updates.

In attendance

The International Budget Partnership reported that representatives of National Treasury, Parliamentary Budget Office and Office of Auditor General will grace the meeting.

I look forward towards actively participating in this important meeting.

I’ll keep you posted on this issue.

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