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Fresh hunt for Auditor to slow down State agencies

Wednesday, December 11, 2019 — updated on December 21, 2020 - 4 min read

Former Auditor-General Edward Ouko. FILE PHOTO | NMG

The government has restarted the process of recruiting the Auditor-General, a move that is set to further complicate financial planning at State corporations.

Public Service Commission (PSC) Chairman Stephen Korogo said Wednesday that none of the 17 shortlisted candidates had met the threshold to replace former Auditor-General Edward Ouko whose term expired in August.

“After thorough analysis of the performance of the applicants, the panel submitted its report to the appointing authority. In its findings, the panel determined that it was unable to pick any names for nomination for appointment as Auditor-General,” Mr Kirogo said in a statement. The position, which had attracted 70 applicants, will now go through another selection process that is expected to stretch beyond the first quarter of 2020.
Already, the Kenya Electricity Generating Company (KenGen) has announced that it will delay its dividend payment for the year ended June after it was unable to publish results for the period due to a bureaucratic holdup.
The Nairobi Securities Exchange-listed firm could not release its financials because of the vacancy at the office of the Auditor-General, which audits books of State-controlled firms.
The State firm paid a dividend of Sh0.4 per share on February 7, 2019, being the payout for the year ended June 2018.
The further delay in publishing its results for the subsequent financial year and the annual general meeting means that the dividend for the review period, if any, will be paid much later than usual.
Analysts say this is likely to result in dumping of the company’s shares, especially by investors who had bought the stock in anticipation of a dividend around the normal payout dates.
Kenya Power and Kenya Pipeline Company, as well as several other State corporations, are also likely to suffer the same fate given that they have been equally affected by the vacancy at the Auditor-General’s office.
The electricity distributor, however, is not expected to declare a dividend for the year ended June.
It has warned investors that its net earnings for the period will be lower by at least 25 percent compared to the year before when it made Sh1.9 billion and failed to declare a dividend.
The Central Bank of Kenya (CBK) has also said that it cannot submit its audited books of accounts to Parliament due to the lack of a substantive Auditor-General to sign them.
Last month, acting Treasury Secretary Ukur Yatani, in a letter to National Assembly Speaker Justin Muturi, cited the vacancy in the National Audit Office for the bank’s failure to submit certified financial statements for the year 2018/2019.
Section 81 of the Public Finance Management Act, 2012 requires the accounting officer of a national government entity to, not later than three months after the end of each financial year, submit the financial statements to the Auditor-General amongst other constitutional offices and publicise the financial statements.
The delayed appointment of the Auditor-General will also leave the government shooting itself in the foot with crippled financial access even from the same corporations and difficulty in determining the accurate share to be allocated to counties.
The Auditor-General’s office is among the most independent with legal insulation from interference from any arm of the government.
“The Auditor-General shall not be subject to direction or control by any person or authority in carrying out his or her functions under the Constitution or under this Act,” reads section 10 of the Public Audit Act 2015.
The rejected nominees are said to have been largely drawn from the Auditor-General’s office, burning their chances of replacing their former boss in the fresh recruitment and heightening chances of having an outsider run the office.

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Fresh hunt for Auditor to slow down State agencies

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