Report: Petty cash in government triples to Sh350 million

Auditor General Edward Ouko 
NAIROBI, KENYA: Public servants in Ministries, Departments and Agencies are still bypassing strict financial management rules to make away with millions of money meant for imprest.

Latest audit of government books of accounts show that outstanding or uncounted for petty cash tripled from Sh117.6 million in 2014/2015 financial year to Sh350.98 million as Heads of State offices failed to recover this from the culprits' salaries.

"Review of management of imprests indicates that imprests continue to remain unaccounted for at the end of the Financial Year. Failure to account for imprests on due date is in contravention of Government Regulations," notes auditor General Edward Ouko.

The Imprest Fund, which is sometimes called Imprest Account, petty cash account or petty cash fund, is supposed to be a self-checking account where a fixed balance is maintained through regular replenishment and is used for paying small and routine operating expenses.

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Failure to surrender the imprest is contrary to a 2013 circular by National Treasury which requires imprest to be surrendered or accounted for within seven working days following return from official journey.  It also breaches the 2015 Public Financial Management Regulation.

"No explanation has, however, been provided for failure by the management to compel staff to surrender these imprests, or recover the same from their salaries," notes the report.

Most key ministries are culprits. Ministry of Devolution and Planning had outstanding imprest of Sh27.7 million with Sh26.6 million being overdue. In the State Department for Devolution, Sh1.32 million is outstanding with Sh203,200 having been issued to employees who have since left the employ of the department.

In addition, imprests and advances of Sh129.9 million issued to various County Commissioners on account of humanitarian aid were not properly accounted for.

Other petty cash uncounted for under the docket of devolution include Sh10.6 million under Natural Resource Management Programme and Sh2.3 million connected to a flood mitigation project in western Kenya.

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Further, imprests adding up to Sh683,678 have been outstanding in earlier years even as imprests amounting to Sh3.2 million were issued to officers who had not accounted for previous issues. The Sh696,560 that was recovered from various officers' salaries in respect of un-surrendered imprests may also have been stolen.

Auditor General Edward Ouko addressing the press in his Anniversary Towers office
Under the Ministry of Defence, the Sh162.3 million issued to officers was not properly accounted for.  In the Ministry of Health, unaccounted for or un-surrendered imprest was in excess of Sh15.5 million.

In the Ministry of Lands, Housing and Urban Development, the imprest and clearance account balance of Sh.45.5 million did not match with the IFMIS imprest register which had a figure of Sh68.1 million.

The same case is with State Department for Labour and Social Protection where while its books showed outstanding balance of Sh11.3 million, Ouko's team found it to have been understated by Sh4.8 million.

In the office of the President, petty cash of Sh1.2 million remained unsurrended by June 2016.

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Also  affected offices include State Department of Livestock (Sh18.4 million), Ministry of Mining (Sh3.86 million), office of Attorney General (Sh6.67 million) and National Assembly (Sh49.9 million), Department 

Edward OukoAuditor General