House committee wants forensic audit on revenue

By Peter Opiyo

It is still not known the exact amount the government collected as revenue in the financial year 2007/2008 even after a parliamentary team probed the matter.

The inquiry arose from a study by Mars Group Kenya whose findings were raised in parliament by Gwassi MP John Mbadi  in April 2011. 

The report is a culmination of a long process that recommended among others complete adoption  of  submissions proposed by the Mars Group Kenya that a foresnsic audit of government revenue be  ordered and executed accordingly.

The parlaimentary team has therefore recommended that a forensic audit be carried out into the revenue accounts of 2007/2008 financial year to establish how much the government collected as revenue.

There have been inconsistencies regarding the amount collected with Kenya Revenue Authority, Ministry of Finance and Auditor General presenting conflicting figures.

Ministry of Finance submitted to Parliament Sh466 billion as unaudited revenue as opposed to audited revenue figures of Sh516 billion. This was an under-declaration to Parliament of about Sh70 billion.

At the time the ministry also declared to Parliament only Sh397.6 billion as ordinary revenue compared to Auditor General’s figure of Sh496 billion, an under-declaration of Sh98.5 billion. On its part KRA said it collected Sh433.9 billion.

It is these inconsistencies that the joint Committee of the Budget and Committee on Finance ventured to probe, following a question raised by Mbadi.

“An independent forensic audit into the revenue accounts of the government of Kenya be conducted for the financial year 2007/2008 to determine the true revenue position of the government,” the team recommends in its report.

During its meetings the team found out that there were several discrepancies in the budget and recommended that the government reviews its accounting systems to make them more efficient.

Inconsistencies were also detected in the total loans by the government in which Treasury availed a figure of Sh20.1 billion against a figure of Sh26.7 billion, an overstatement of Sh6.6 billion to Parliament.

And under miscellaneous revenue, the team points out that Parliament was informed that only Sh7.6 billion was realized but the exchequer records were showing Sh16 billion, an understatement of Sh8.6 billion.

The team co-chaired by Nambale MP, Chris Okemo and Maragwa MP, Elias Mbau, also pointed to an understatement to Parliament of Sh7.5 billion regarding corporation tax. Sh79.1 billion was reported to Parliament while the Exchequer records had Sh86.6 billion.

From the report the ministry of Finance also submitted to Parliament net domestic borrowing by Central Bank of Kenya as Sh-13.9 billion while the Exchequer records showed Sh0.0, pointing to a net borrowing that did not exist.

Owing to these inconsistencies the team also recommended that government accounts should be fully qualified and must be registered by a professional body.

It also recommends that Audit Committee should work closely with the Auditor General, KRA and Controller of Budget to ensure timely provision of required documents, data and explanations to avoid audit queries escalating into major issues.