The Government is putting in place a framework for the adoption of institutional risk management policies, strategies, and frameworks by public entities.
This is in line with the provisions of the Public Finance Management (PFM) Act and regulations. According to the Public Sector Accounting Standards Board acting Chief Executive Patrick Abachi, the PFM Regulations gazetted in 2015 for national and county governments prescribe risk management strategies.
These include fraud prevention mechanism as well as the development of a system of risk management and internal control that builds robust business operations.
“One of the main functions of the board is to prescribe and pronounce generally accepted internal auditing standards for national and county governments and their bodies. We are also mandated to mainstream best practices for good governance, internal controls and risk management in the public sector,” Said Abachi.
“It is for this reason that we are working on a framework that will see all government entities adopt risk management strategies since the roles of accounting officers in those entities are clearly stipulated in the regulations.”
The progress of the approach to fiscal reforms in public sector organisations is being demonstrated in line with the PFM Act which was enacted in 2012.
The PFM reform targeting public entities is part of the wider strategy aimed at providing a framework for effective management of public funds by both levels of government.
Adding that risk is part of the raft of issues affecting public finance administration in the country. Mr Abachi, however, pointed out that the national and devolved governments and their agencies will be the main beneficiaries of the agenda. “Risk management is a tool that enables management teams to make informed decisions for the enhancement of operational efficiency, financial prudence and corporate governance in the public sector from ministries, agencies, parastatals, county governments, and their bodies.
On issue affecting semi-autonomous government agencies, the acting chief executive said boards in those organisations are guided by provisions of the Mwongozo Code of Conduct which explains their role on risk management. This supplements the board’s effort.
As part of the process, Abachi said they will be conducting a situational analysis across the public sector so as to adopt the best approach and implementation strategies to ensure all stakeholders support the reforms.
He said risk management in public institutions revolves around decision making that contributes to the achievement and implementation of their respective strategic mandates.
The Public Sector Accounting Standards Board was established and constituted in 2014.
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