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How the Auditor General plans to apply financial reporting

Economy

How the Auditor General plans to apply financial reporting


Auditor General CPA Nancy Gathungu. PICTURES | FRANCIS NDERITU | NMG

pol-auditorPrincipal secretaries and parastatal bosses who fail to implement the Auditor General’s recommendations will face penalties if Parliament approves changes to the law aimed at enforcing compliance.

This is after the Auditor General tabled in Parliament a proposal to revise the Public Financial Management Act 2012, to make implementation of audit recommendations mandatory for all public entities.

The proposals further seek to introduce and enforce sanctions against accounting officers in government ministries, departments and agencies who fail to comply.

The Public Audit Act 2015 requires the Auditor General to indicate in audit reports the responsiveness of a state body or public entity in implementing the findings of previous audits.

The Auditor General says Parliament and County Assemblies have made several recommendations arising from the audit reports which need to be implemented by constitutional commissions and independent offices.

“Specifically, over the years, a total of 827 recommendations made to the Constitutional Commissions and Independent Offices in their oversight capacity of the Public Accounts Committee (PAC), Special Funds Accounts Committee (SFAC) and the Public Investments Committee (PIC) and for which none have had their status of implementation reported to the respective legislative bodies of government,” said Nancy Gathungu, the Auditor General.

Ms. Gathungu wants the Public Finance Management Act to be amended to enforce the recommendations that are given every fiscal year but not implemented.

“We continuously offer audit recommendations to improve accountability, transparency and the effective, economical and efficient collection and use of resources,” she told a forum of constitutional commissions and independent offices.

“However, account administrators have not implemented recommendations that would have alleviated some of the current issues we are facing as a country.”

She cited the lack of an effective mechanism for monitoring the implementation of audit recommendations and the lack of consequences or sanctions required for non-compliance as some of the reasons why accountants do not implement audit recommendations.

“This has led to the continued failure of some accountants to adequately account for the management and use of public resources entrusted to them,” Ms Gathungu said.

“It has also led to budgetary indiscipline including misallocation, waste of resources, theft and corruption which in turn has affected development programs thereby threatening the sustainability of service delivery and the well-being of citizens”.

Ms. Gathungu said her office has noted an increase in unsupported expenses where the auditor has over the years recommended entities improve their record keeping to support financial transactions.

“While there has been an improvement in MDAs, with unsupported expenditure rising from Sh8.2 billion in FY 2016/17 to Sh3.35 billion in 2020/21, there is still a lot to be done because these are large amounts. this may indicate a loss, waste or misuse of public funds,” she said.

Ms. Gathungu noted that the value of payments made for stalled projects implemented by government entities is increasing every year. She said that in 2016/17, 2.5 billion shillings were disbursed to incomplete projects or projects that had exceeded their duration.

“This amount has increased to 3.18 billion shillings in 2020/21 although the Auditor General’s office has recommended that MDAs complete existing projects before launching new ones to ensure there is a budget. adequate for the projects,” Ms. Gathungu said.

She said the pending bills have become a national issue as national and county governments owe providers.

“As of June 30, 2021, the national government has presented information that it owes 359 billion shillings to suppliers, of which MDAs owe 36.4 billion shillings and state-owned companies 323.2 billion shillings,” it said. she declared.

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