Auditor General pleads for Sh15bn budget, independence

Auditor wants National Treasury to let OAG manage its own funds for independence

In Summary

• Current budget is only Sh5.2 billion, far from enough to achieve goals. Auditor General Gathungu seeks Sh15 billion. Says reports gather dust.

• She wants law changed to shorten to one month the period for state agencies to submit their financial statements for audit. Complains of poor bookkeeping.


Nancy Gathungu after she was sworn in as the Auditor General at the Supreme Court building on July 17.
WANTS INDEPENDENCE: Nancy Gathungu after she was sworn in as the Auditor General at the Supreme Court building on July 17.

Auditor General Nancy Gathungu on Wednesday complained her office's budget of Sh5.2 billion is far too low - she needs Sh15 billion.

She appealed to the Finance committee of the General Assembly to consider increasing her office’s allocation to at least 0.5 per cent of the national budget.

This would push the allocation to about Sh15 billion, as the national budget averages Sh3 trillion.

Gathungu said her office on average gets 0.2 per cent of the national budget, an amount she called "highly inadequate".

“For comprehensive coverage, effective and efficient audit services, the budget for the OAG should not be less than 0.5 per cent of the national budget,” she said.

The office was allocated Sh4.4 billion (0.2 per cent) in fiscal year 2016-17; Sh5.5 billion (0.24 per cent) in 2018; Sh5.2 billion (0.19 per cent) in 2019; Sh5.7 billion (0.18 per cent) in 2020 and Sh5.2 billion (0.19 per cent) in the current year.

“This funding has not been enough to enable us carry out comprehensive and continuous audits for greater effectiveness,” she told the Finance committee of the National Assembly.

The auditor said resource constraints have resulted in compliance and financial audits being conducted simultaneously, hence, affecting in-depth audit reviews.

Former Auditor General Edward Ouko, who unearthed many scandals, was disliked and said he was even threatened occasionally. There were efforts to clip his wings and undermine audits.

He pointed out the same shortcomings Gathungu cited, including audit reports gathering dust when action was required. 

Gathungu also revealed to the committee chaired by Homa Bay Woman MP Gladys Wanga an array of problems hindering OAG's operations.

She said the office fleet is old, only 18 of 32 vehicles have been replaced in three years.

“We need to replace the motor vehicles that we have been supplementing through leasing, whose budget has equally been removed,” the auditor said.

She said they have had to queue the movement of auditors, which has slowed audits.

She wants the law changed to shorten to one month, the period for state agencies to submit their financial statements for audit.

“This will also ensure the latest audited accounts used for purposes of revenue sharing do not have a backlog,” she told MPs.

The auditor further complained the government's policy to consolidate ICT expenditure under CS Joe Mucheru's ministry is marred by problems.

Gathungu cited the renewal of running contracts and software licenses.

“It is important to note the ministry is also our client and has been given the role to manage expenditure for the Auditor General," she said.

Apart from procurement challenges, the ICT budget has been decreased from Sh161 million, when it was under OAG, to Sh21 million.

The auditor sounded the alarm that her office's audit documentation is hosted in servers and therefore exposed to risk of loss in case of security breaches or natural disasters. OAG wants provision for a disaster recovery site.

Gathungu also said the cost of rent was too high following delays in constructing OAG headquarters on property acquired in 2014.

For the past six financial years, the auditor general has spent Sh852.2 million on rent alone and is projected to spend another Sh602.3 million by June 2023.

At least Sh118 million was spent in 2015, Sh90 million in 2016, Sh109 million in 2017, Sh183 million in 2018, Sh167 million in 2019 and Sh183 million in 2020.

“We are seeking funding from the Treasury for construction of the headquarters that will not only save on rent but also ensure safety for staff, equipment and office’s independence,” Gathungu said.

She was also concerned the Auditor General’s budget is controlled by the National Treasury – also its client and key stakeholder.

The auditor said the Treasury occasionally deactivates some modules in Ifmis to control expenditure.

“This does not only contribute to delay of audits, hence, delaying reporting, but also interferes with the independence of the Auditor General as enshrined in the Constitution," Gathungu said.

“It is our desire to have a one-line budget whose adequacy is assured by the National Assembly. This will ensure flexibility in usage of the allocated budget.”

Gathungu also complained about ministries, state departments and agencies pervasive failure to maintain proper accounting records.

The auditor is also unhappy with the implementation of audit recommendations by the concerned state agencies.

“This probably arises from the lack of sanctions on non-implementation of audit recommendations,” she said.

The OAG is also concerned that performance audits are gathering dust in Parliament.

Gathungu also wants the law changed to recruit the auditor before lapse of the incumbent’s term. She wants independent management of funds and powers to recruit staff.

(Edited by V. Graham)