How to guard against wasteful spending and misallocation of public resources

In his report, the auditor-general notes that some devolved units are spending in total disregard to the Constitution, the Public Finance Management Act of 2012, the Public Procurement and Disposal Act and other fiscal responsibility principles that must be adhered to by the two levels of government.

For instance, Nairobi County has been accused for failing to bank a quarter of a billion shillings collected as revenue by the county government.

In Mombasa, the auditor exposed how the county government failed to bank part of Sh1.7 billion collected during the financial year under review.

The report cites other areas of funds misuse such as spending on foreign trips, unauthorised allocation to finance car and mortgaging loans, over spending beyond budgetary limits, payment of monies to non-existent entities, operating multiple bank accounts and disregarding rules and regulations issued by the Salaries and Remuneration Commission (SRC), the Commission on Revenue Allocation (CRA) and other statutory requirements.

Kenya finds itself at a crossroads of graft, high un-employment rate, increasing inequality, poverty and high inflationary pressures which continue to impact negatively on its economy.

As a country, we are still vulnerable to external shocks such as uncertain global trends, oil price increases, insecurity and social uprisings among other factors.

There is little doubt that corruption is alive and kicking in Kenya. Despite years of constitutional, legal, political and policy efforts to reduce the vice, the media is awash with reports which suggest that the war against corruption is being lost, one scandal at a time.

Have the people of Kenya become indifferent to their own plight? Are we ready to learn from our past mistakes and missteps? If this is the case, why do we have volumes of audit and financial reports which are yet to be acted upon several years after their publication?

It is disheartening to note that as a country we continue to treat these reports with contempt and give them official neglect notwithstanding their contents and not taking decisive action on recommendations therein.

Since the promulgation and eventual implementation process of the Kenya constitution 2010, we have spread ourselves thin in order to meet the many demands that came with the New Constitutional dispensation.

Our revenues and resources have been stretched towards the establishment and maintenance of the new structures. This has had a tremendous impact on service delivery and economic development. The cost of running new structures is directly borne by taxpayers.

But the Institute of Certified Public Accountants of Kenya (ICPAK) is concerned that prudence and responsibility are not being applied in the management of these scarce resources at the county government level.

The recent report by the Auditor General paints a grim picture in as far as management of public funds by some devolved units is concerned.

The Auditor General noted that there is manifest abuse of public procurement rules and regulations by county governments.

Keeping quiet or throwing in the towel would, however, be tantamount to giving up on the hope of ever pulling this country out of the curse of underdevelopment and extreme poverty that a majority of our people live in.

In order to ensure prudence in the management of public funds, it will be vital to observe and abide by the following recommendations.

The county units should strive to professionalise their financial management functions. The County Service Boards are therefore expected to employ qualified and certified professional accountants to manage county government coffers.

If those managing county resources are under ICPAK’s purview, it will be possible to discipline them in case they are involved in any act of financial impropriety.

This will include blacklisting such accountants to prevent them from being employed in future. We encourage all employers in Kenya and the region to conduct reference checks with ICPAK whether their accountants are members.

Oversight institutions such as Parliament, Ethics and Anti-Corruption Commission and Director of Public Prosecutions should swing into action and ensure that all public officials implicated in the misuse of public funds are prosecuted without further delay.

The National Anti-Corruption Campaign Steering Committee (NACCSC) should step up its campaign against anti-corruption efforts so as to create awareness among Kenyan public on the negative effects of corruption.

It is further recommended that the two levels of government should establish instruments for systematically assessing the performance of procuring departments with a view of ensuring compliance to set procurement rules and procedures.

Public procurement audit and inspection is essential in improving accountability. This must be done at all levels of the procurement cycle.

There should also be a speedy amendment of the Public Procurement and Disposal laws to put in place punitive measures for non-compliance. If the hope of progress is to be kept alive, graft must be fought unforgivably and unreservedly.

But this cannot be achieved if the organisations tasked with the mandate of fighting it have a whiff of corruption about them.

The government must take strong measures to prevent corruption by adopting strong legal and institutional framework to insulate bodies mandated with the responsibility of detecting and fighting graft such as the Office of Auditor General, Ethics and Anti-Corruption Commission, among others.

Additionally, all outstanding corruption reports, including the Auditor General reports, the Controller of Budget reports, and the Public Accounts Committee reports are fully implemented and perpetrators effectively punished.

We must guard against wasteful expenditure and misallocation of public resources.

The writer is the chairman, Institute of Certified Public Accountants of Kenya.