Economy

Sh7bn lost in last year’s Budget as Ouko queries billions of spending

ouko

Auditor General Edward Ouko. PHOTO | FILE

The government could not account for Sh7.3 billion during the year to June 2015, Auditor General Edward Ouko has said in a new report.

Mr Ouko said a number of ministries, departments, commissions and funds also incurred Sh14.4 billion in expenditure whose value could not be established.

He said the failure to account for Sh7,321,277,260  is a significant improvement compared to the 2013/14 financial when Sh66,782,697,987 was unsupported.

Mr Ouko said government institutions did not produce records and documentation for audit and therefore he could not ascertain whether the public funds were utilised lawfully and in an effective manner.

“With no value in return, the funds spent on the expenditure of Sh14,449,695,088 is deemed to have been wasted,” he said in a report on the financial statements  for ministries, departments, commissions, funds and other accounts of the government for the year 2014/15.

He said the audit of the financial statements for the year ended June 30, 2015, indicates that out of the audited 108 financial statements, only 27 financial statements or 25 per cent had a clean (unqualified) audit opinion, 51 or 47 per cent had qualified audit opinion, 19 or 18 per cent had an adverse opinion while 11 or 10 per cent had a disclaimer of opinion.

Mr Ouko said out of the total expenditure of Sh1,22 trillion only Sh12.8 billion or 1.05 per cent  was incurred lawfully and in an effective way. Expenditure amounting to Sh754,391,459,499 or 61.80 per cent had issues hence qualified opinion while expenditure totaling Sh372,619,272,561 or 30.5 per cent were misleading or incomplete hence an adverse opinion.

“I was unable to confirm whether expenditure totaling Sh80,835,060,309 was incurred effectively and lawfully as required by Article 229(6) of the Constitution of Kenya. Included under unqualified opinions is Sh2,842,734,000 relating to expenditure incurred by my office. The Office of the Auditor-General is audited separately and reported to Parliament by an independent auditor who is also appointed by Parliament,” he said.

Mr Ouko said out of the total revenue recorded during the 2014/15 financial year of Sh1,08 trillion, only revenue amounting to Sh36,9 billion or 3.41 per cent was collected and fairly recorded and therefore had an unqualified opinion.

“Revenue amounting to Sh1 trillion or 96.32 per cent though also fairly recorded had issues resulting in a qualified opinion while revenue amounting to Sh2.8 billion or 0.27 per cent had no proper records and could not therefore be confirmed as accurately reported,” he said.

 Mr Ouko said a number of ministries and departments did not settle bills amounting to Sh43.2 billion which was an increase of 160 per cent from the previous year’s figure of Sh16.6 billion.

“The figure of Sh43,212,107,778 comprises Sh17,168,420,458 and Sh20,731,068,491 under recurrent and development votes respectively and a further Sh5,312,618,829 not classified. The bills were instead carried forward to 2014/2015 financial year,” he said.