Uhuru backs Treasury on budget and regulations in new audit law

President Uhuru Kenyatta has rejected a clause granting the Auditor General Edward Ouko financial autonomy.

The President said the budget of the auditor general has to first be submitted to the National Treasury for review, to make sure that the Government can afford whatever projects that the auditor wants to carry out.

In a 12-page memo to the National Assembly, the President said there was no way the Auditor General can be allowed to directly submit the budget request to the National Assembly. “All estimates of the revenue and expenditure for the national government should be reviewed by the Cabinet Secretary responsible for Finance to ensure that the national government budget submitted to Parliament is balanced,” the President said in his memo to the Public Audit Bill, 2015.

The National Assembly and the Senate, noting that the National Treasury was also audited, and therefore, it might starve the Auditor General of cash if it gets adverse reports, had decided to make sure that the Auditor General’s budget came to the House as submitted, and if the National Treasury had problems, then, it had to send its comments to the MPs.

In the 2015/16 budget, the Auditor General’s office got Sh4.1 billion, of which Sh76 million will be used to audit the Constituency Development Fund (CDF) in the 290 constituencies; Sh539 million to audit the 47 county governments and Sh250 million will be used to do special audits on government projects.

The audit of the national government will cost Sh3.2 billion, while Sh405 million will be used to buy assets – the office has been trying to get money to build a headquarter in Nairobi, and to set up offices in select places in the country.

President Kenyatta has also told off the Auditor General over his role to issue comments on the suitability of government projects and some policies. He said the current Act was very clear that Auditor General shall not question the merits of government policy objectives. “For the avoidance of doubt, it is necessary to provide clearly that the Auditor-General shall not question the merits of policy objectives of the national government or county government or any other public entity,” said Kenyatta in the memo sent to the National Assembly.

The gag on policy comes after the Auditor General publicly alerted the public that some of the policies initiated by Kenyatta when he was Finance Minister – such as the one ordering low-engine capacity vehicles—had failed, because the luxury fuel guzzlers which had been surrendered as the new policy was being implemented were rotting in a government yard four years later.

President Kenyatta has also told the MPs to delete a clause giving the Auditor General the powers to make regulations. He said that is the work of the Cabinet Secretary for the National Treasury Henry Rotich.

“The Cabinet Secretary is responsible for policy formulation relating to public finance management and therefore it is important to assign powers to make any subsidiary legislation relating to public finance to the Cabinet Secretary. This will facilitate smooth coordination of the overall public finance management systems,” said President Kenyatta in his memo to the House.

The President is also emphatic that while it is good for the Auditor General to have operational autonomy when it comes to appointing staff, there was need for the Public Service Commission (PSC) to step in and deal with staff issues. He also rejected the proposal giving the Auditor General the power to set pay for expert or new staff, unless that is done through the PSC and after talks with the Salaries and Remuneration Commission.

Most senior person

“Such powers ought to be checked, especially in matters of appointment, promotion, exercising disciplinary control, development of human capital, determination of remuneration and benefits of staff,” said the President.

President Kenyatta maintains that the Auditor General can only venture into the personnel issues with the written authority of the Public Service Commission as per article 234(5).

“The Commission may delegate, in writing, with or without conditions, any of its functions and powers under this Article to any one or more of its members, or to any officer, body or authority in the public service,” reads article 234(5) of the Constitution.

For now, the President added that he will need a window to appoint someone to act as Auditor General on the recommendation of the PSC, just in case there’s a vacancy. He wants the law amended to allow him to designate the most senior person in that office as the Auditor General for 90 days, as a substantive replacement is sought.

The President’s changes to the Bill have been submitted to the House Committee on Finance, Planning and Trade, and once they are done, they will send the same to the Senate Committee on Finance, Planning and Trade.