Institute of Certified Public Accountants of Kenya blames graft on lack of internal audits

Institute of Certified Public Accounts if Kenya (ICPAK) Chairman Fernades Barasa (right) is franked by ICPAK CEO Patrick Ngumi during a meeting at Flamingo Beach Resort and SPA in Mombasa County on Wednesday 14th October 2015. They urged everyone to help in fighting corruption. Photo/Kelvin Karani

Only one county in Kenya has an internal audit committee, painting a grim picture of the dismal financial oversight culture that facilitates corruption and wasteful spending in the country's administrative units.

According to a new report launched by the Institute of Certified Public Accountants of Kenya (ICPAK) and the National Treasury, only Nairobi County has an audit committee, despite the existence of a ten-year government circular directing the formulation of audit committees in all public institutions.

The report comes on the back of concerns raised on perennial wasteful spending by county governments particularly in recurrent expenditure, which goes to funding lavish lifestyles and unnecessary trips by county government officials.

According to the County Government Implementation report of the 2014/15 financial year released last month by the Controller of Budget, Kenyan counties spent a total of Sh258 billion, with Sh167.56 billion going to recurrent and Sh90.44 billion for development expenditure.

The controller of budget further indicated that 40 per cent (Sh103 billion) of county resources were spent on salaries and allowances of county staff with another Sh64 billion spent on operations and maintenance. Only 30 per cent (Sh90 billion) of county government resources were spent on development.

"The National Treasury through the Public Sector Accounting Standards Board (PSASB) should fast-track on issuance of guidelines on establishment, composition and minimum qualifications for persons to be appointed to Audit Committees of public sector institutions," stated Mr Fernandes Barasa, ICPAK National Chairperson.

In addition to this, the survey by ICPAK found that while almost all government ministries in the Central government had auditing boards, majority of them lacked in appropriate skills and competences.

"Considerations should be made to qualification, experience, and the appropriate skills mix of the entire committee and by extension the Board since the committee is drawn from the members of the board," said  Barasa.

The report comes as the role of audit professionals and institutions in the country comes under scrutiny following cases of financial appropriation highlighted in several high profile State firms including Uchumi, Mumias Sugar Company and Kenya Airways.