Auditor General office receiving inadequate funding - PAC

The recommendations are contained in a committee report of 72 ministries.

In Summary

•PAC has now recommended the annual budget allocation to the office shall not be less than one-half per cent of the total revenue collected by the national government.

•The committee says the office has for the last three financial years received only 60 per cent of its required resource.

Auditor General Nancy Gathungu during a session in Parliament on December 7, 2021.
AUDIT QUERIES: Auditor General Nancy Gathungu during a session in Parliament on December 7, 2021.
Image: EZEKIEL AMING'A

The office of the Auditor-General is attributing the failure to achieve its scope in terms of audit of government entities to inadequate funding from the Treasury.

It is also citing delays in disbursement of funds and shortened duration of the audit circle.

The institution, required to assess and submit its financial reports to the parliament and county assemblies six months after the end of each fiscal year, according to a public accounts committee (PAC) has for the last three financial years received only 60 per cent of its required resource.

The disclosure is contained in the latest report on audited financial statements of 72 ministries, state departments, commissions and independent offices.

“PFM Act reduces the timeline to three months by giving entities leeway up to end of September to prepare and submit financial statements for audit, the shortened period adversely affect the audit in terms of coverage and comprehensiveness,” reads the report in part.

In a bid to address this, the committee chaired by Ugunja MP Opiyo Wandayi has now recommended that the annual budget allocation to the office shall not be less than one-half per cent of the total revenue collected by the national government.

The amount is to be calculated based on the most recent audited accounts of revenue as approved by parliament.

The committee members are further directing an amendment of Section 20 of the public audit such that the finance cabinet secretary shall ensure the allocation is effected is not less than the endorsed.

A summary of the allocation to the office in the 2016/17 financial year shows that the office received Sh4.42 billion against the required Sh8.25 billion which represents a shortfall of Sh3.82billion.

In the subsequent year, it was allocated Sh5.29 billion a drop from its target of Sh8.72 billion, representing a deficit of Sh3.42 billion.

In 2018/19, it had a shortfall of Sh3.23 billion from its required amount of Sh5.96 billion and another Sh3.37 shortage as compared to the required Sh8.88 billion in 2019/20 years.

On lack of effective mechanisms for following up on the implementation of audit recommendations to avert the recurrence of audit queries, the committee is calling on the public service commission to establish a specialized audit oversight department.

The body at the parliamentary budget office, the committee says, will provide technical backstopping on all audit matters to the watchdog committees of parliament and will collaborate with the auditor general’s office.