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Economy

Auditor-General pokes holes in public debt billions

Auditor General Edward Ouko. FILE PHOTO | NMG
Auditor General Edward Ouko. FILE PHOTO | NMG 

Auditor General Edward Ouko has questioned the authenticity of the public debt registry, citing unexplained entries amounting to Sh219.60 billion in the year to June last year.

Mr Ouko said some of the balances presented by the Treasury lack supporting documents while have been revised without explanation and some show entries that differ in two books.

An audit of the debt show payments in cash books of Sh35.2 billion that cannot be found in bank statements. A payment of Sh33.2 billion is showing in the bank statements but missing in the cash book.

While interest on domestic borrowing is recorded in the books as Sh124,779,531,719, Mr Ouko said the trial balance uncovered a lower figure of Sh124,283,147,016, leaving unexplained difference of Sh496.3 million.

“In the circumstances, the accuracy and completeness of the interest on the domestic borrowings included in the cost of finance could not be ascertained,” said Mr Ouko states in an adverse opinion on the public debt for year to June 2016.  

An adverse opinion refers to misrepresentation and misstatement in book-keeping.

Repayment of Kenya’s outstanding public debt, which hit Sh3.385 trillion by June last year, has since risen to become the single-largest budget expenditure. Taxpayers paid Sh320 billion for debt in the year to June.

In his qualified opinion of the Treasury records, Mr Ouko has flagged off the Sh26.62 billion recorded as an outstanding balance of the government’s Pre-1997 overdraft.

The correct amount, he said should have been higher by Sh548 million because the Treasury which opened the 2014/15 financial year with a balance of Sh28.27 billion had repaid a total of Sh1.11 billion during the period.

Editor's note: The third paragraph has been altered to indicate that the unexplained difference is Sh496.3 million.

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