Parliament has directed the Auditor General, Nancy Gathungu, to carry out a forensic audit on the revenue generated by the Kenya Roads Board (KRB) from the fuel levy for the financial year 2020/22 to 2022/23.
The National Assembly’s Public Investment Committee on Commercial and Energy Affairs says the forensic audit should confirm the amount that the Kenya Revenue Authority (KRA) collected and disbursed to KRB and the amount KRB disbursed to road agencies in relation to fuel levy for the stated period.
Auditor General had questioned the unreconciled Road Maintenance Levy Fund (RMLF), saying the statement of financial position reflects receivables from non-exchange transaction balance of Sh5.5 3 billion.
Ms Gathungu said included in the balance is RMLF grant receivable balance of Sh5.08 billion from the Kenya Roads Board.
Auditor-General Nancy Gathungu.
Photo credit: File | Nation Media Group
“However, the audited financial statements of the Kenya Roads Board reflect RMLF disbursement payable to Kenya Urban Roads Authority balance of Sh2,322,321,695, resulting in a variance of Sh2,755,302,399, which was not explained or reconciled,” Ms Gathungu said.
“In the circumstances, the completeness and accuracy of grant receivables amounting to Sh5,177,634,094 could not be confirmed.”
While appearing before the committee chaired by Pokot South MP David Pkosing, the Kenya Urban Roads Authority Director General Silas Kinoti said the grant receivable from the Kenya Roads Board amounted to Sh5,177,634,094 as reported in the financial statements for the year ended June 30, 2022.
He said the amount was subsequently received at the beginning of the financial year 2022/23 and was correctly recorded as per the accounting standards.
“The committee directs the Auditor General to carry out a forensic audit on the revenue generated by the Kenya Roads Board from the fuel levy for the financial years 2020/21 to 2022/23,” Mr Pkosing said in a report on audited financial statements of seven road agencies.
Director-General of the Kenya Urban Roads Authority Silas Kinoti.
Photo credit: Pool | Nation Media Group
“Further, the forensic audit should confirm the amount that the Kenya Revenue Authority collected and disbursed to the KRB and the amount the KRB disbursed to agencies in relation to fuel levy for the stated period.”
The committee also directed Mr Kinoti to submit a comprehensive report to the National Assembly on the intended securitisation of the Road Maintenance Levy Fund and the progress it has made in tackling the pending bills within three months of adoption of the committee report.
The committee observed that KURA had accrued huge amounts of pending bills. Ms Gathungu had flagged a balance of Sh15.4 billion in respect of payables from exchange transactions, which comprised current payables amounting to Sh14.18 billion and non-current payables amounting to Sh1.18 billion.
She said the balance includes an amount of Sh14.15 billion due to suppliers and contractors. “The total balance as at June 30, 2022 when compared to the amount of Sh12.28 billion reflected in the financial statement for the period ended June 30, 2021, results to an increase of Sh3.078 billion or 25 percent and exposed the authority to unnecessary and avoidable costs of claims of interest and penalties on late payments to contractors on various projects,” Mr Pkosing said.
He said an increase in pending bills may affect the cash flow of the authority and adversely affect its operations.
