Auditor-General Nancy Gathungu. At least 21 governors will leave office in August without accounting for how they spent public funds in the past three years, because reports by her office have been delayed.
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Audit reports delay could save outgoing governors scrutiny
At least 21 governors will leave office in August without accounting for how they spent public funds in the past three years, because Auditor-General reports have been delayed.
The latest county expenditure reports relate to the 2018/19 financial year, which leaves 2019/20 and 2021/22 unaccounted for.
The delays coincide with political campaigns, with senators, who are supposed to hold county executives accountable on spending, seeking re-election or election to other posts.
Under the 2015 Public Audit Act, counties are supposed to submit their financial statements - indicating how money was used in a particular financial year - to the Auditor-General within three months after the end of each fiscal year.
“Within six months after the end of each financial year, the Auditor-General shall audit and report, in respect of that financial year, on the accounts specified in Article 229 of the Constitution,” the law states.
But on the websites of the Auditor General and Parliament - where the reports are required to be legally published after they are submitted to Parliament - the latest reports relate to 2018/19.
Respond to reports
Yesterday, Taita Taveta senator Johnes Mwaruma, who was a member of the Senate’s County Public Accounts and Investments committee - whose mandate lapsed in December - said the earliest governors can be invited to respond to the Auditor-General’s reports would be from February, when the Senate resumes.
This is because the committee’s mandate lapses at the end of every year (session) and has to be reconstituted when the session resumes next month, or if its mandate is extended.
“The latest reports in the Senate are on the 2019/2020 financial year which were tabled towards the end of last year. Governors and other players in counties have not been invited yet.
“There is a possibility that little progress will be made if parties choose to reconstitute the committee, since in the past the process has always taken time. For instance, last year, it went up to April. By April this year, many members will be engaged in campaigning,” the senator said.
The Office of the Auditor General (OAG) also said that although it had already submitted the 2019/20 reports to parliament, work on 2020/21 reports was still in progress. The office which is supposed to upload reports after two weeks of their tabling in parliament, has not uploaded any report relating to 2019/20.
Go home
More than 20 governors are expected to go home after the August 8 elections after completing their second and final constitutional term in office, meaning they will no longer be held accountable.
The governors serving their final terms are Josphat Nanok (Turkana), Cyprian Awiti (Homa Bay), Amason Kingi (Kilifi), Cornel Rasanga (Siaya), Jackson Mandago (Uasin Gishu), Moses Lenolkulal (Samburu), Okoth Obado (Migori), Samuel Tunai (Narok), Sospeter Ojaamong (Busia) and Salim Mvurya (Kwale).
In Kisii, Governor James Ongwae will also be going home after serving two terms, alongside governors Alfred Mutua (Machakos), Ali Joho (Mombasa), Alex Tolgos (Elgeyo-Marakwet), Wycliffe Oparanya (Kakamega), Kivutha Kibwana (Makueni), Mwangi Wa Iria (Murang’a), Martin Wambora (Embu), Paul Chepkwony (Kericho), Patrick Khaemba (Trans Nzoia) and Ali Roba (Mandera).
The delay in releasing the reports is a drawback for Public Financial Management (PFM) requirements. It also exposes a big loophole in a year when many counties will be operating on uncertainties as many governors exit after the August elections.
Some of the counties whose accounts have not been audited during the period have a record of spending funds carelessly and failing to account for expenditures of public money, leading to losses.
Audit opinions
In the last two audited years for the devolved units - 2017/18 and 2018/19 - at least six counties recorded the two worst audit opinions (Adverse Opinion and Disclaimer of Opinion).
That means auditors encountered many fundamental discrepancies in their financial statements, making them wrong and misleading (Adverse) or that there were so many missing documents or explanations that auditors lacked enough information to form an opinion (Disclaimer).
Homa Bay County ranks among the worst on spending public funds, with its last two opinions being labelled Adverse (2018/19) and Disclaimer (2017/18).
Kilifi, Embu and Murang’a counties, which had a Qualified Opinion in 2018/19 also had an Adverse Opinion in the previous financial year, while Migori, which also had a qualified audit opinion in 2018/19, had a Disclaimer in 2017/18.
Prof Chepkwony’s Kericho saw its financial reporting worsen from a Qualified Opinion in 2017/18 to an Adverse Opinion in 2018/19.
A Qualified Opinion means that the financial statements have been fairly presented, although some specific discrepancies are noted. All the other counties with governors serving their last terms had this opinion in the two years.
Withholding of funds
“Where there is a serious material breach or persistent material breaches of the provisions of this Act, the Auditor-General may in his audit report to Parliament or the relevant county assembly pursuant to the Public Finance Management Act, 2012, recommend the withholding of funds to any State Organ or public entity,” the Public Audit Act, 2015, states.
But the Auditor-General has recommended the withholding of funds to any county, even when glaring cases of financial misappropriation have been found, and counties feared to have lost millions.
Of the counties whose governors are expected to seek re-election, four had an Adverse Opinion or Disclaimer in the year to June 2019.
In Vihiga County, Governor Wilber Ottichilo had an Adverse Opinion, Kitui’s Charity Ngilu had a Disclaimer, while Kisumu’s Anyang’ Nyong’o and Isiolo’s Mohammed Kuti had an Adverse Opinion.
Flouted laws
The latest report by the senate committee on counties usage of public funds - Fiduciary Risk Report: Issues Raised by the Auditor General on Public Financial Management by the County Governments for financial years 2012/13 – 2015/16- found counties flouted laws on prudent financial management.
“During the period under review, FY 2013/14 to FY 2015/16, a number of County Governments did not settle bills amounting to Sh62.8 billion in FY 2013/14, Sh108.9 billion in FY 2014/15 and Sh74.9 billion in 2015/16,” the report stated.
“The audit report reveals that during the first years of devolution, counties recruited staff without following due recruitment procedures and in absence of policy to determine optimal staffing levels,” it added.
The committee recommended the full implementation of the government’s official procurement system, IFMIS, and that OAG henceforth undertakes special audits on selected counties from time to time, in order to promote the principles of public finance as enshrined in the Constitution.
