State can’t account for its assets or liabilities, team told

By Jevans Nyabiage

Most Government ministries and parastatals cannot account for their assets and liabilities, which the Office of the Auditor-General blames on poor accounting practices.

Appearing before Parliament’s Public Accounts Committee (PAC) yesterday, officials from the State audit office said of the 173 financial statements received in 2010/2012 financial year for audit, only 51 could be certified — a mere 29 per cent of the statements.

The Ababu Namwamba-led team wanted to establish the true position of the Government balance sheet, before and after county governments took effect.

Deputy Auditor-General Alex Rugera said most ministries and parastatals use cash basis accounting — meaning capital is expensed in the year it is incurred or they only account for what they have received through appropriations.

“No permanent records of assets and liabilities are maintained,” Rugera said, adding the Auditor-General’s office did not establish the exact position of the Government of Kenya’s assets and liabilities as at June 30, 2011, 2012 and 2013.

In some balances of accounts, he said, Sh8.6 billion was unsupported in terms of expenditure and Sh3 billion was excluded.

In an earlier interview with the Standard on Sunday, Auditor-General Edward Ouko said there was unexplained expenditure in the yet to be released 2011/2012 audit report.

“I have just signed the 2012 audit and in this report, over 33 per cent of the Sh900 billion in the budget expenditure is unsupported or unexplained,” he said.

He said most reports given by ministries are unexplained, raising serious management and corruption issues.

“There are major discrepancies between reports issued by KRA, Central Bank and the Treasury,” Ouko said. “A lot of wastage is going on with departments revealing imprest that have not been returned, poor accounting and unattended reconciliations,” he added.