Three major concerns have run across most reports on the effectiveness of the Auditor General's office.
The challenges are how to make audit findings actionable, ensure those in office are accountable and address poor funding of the office that has weakened its independence.
Parliament is now seeking to shield the Auditor-General from budget cuts that have hindered the office from carrying out its mandate and enhancing accountability.
Parliament is proposing to fix the annual budget allocation to the Auditor General at not less than 0.5 percent of all revenue collected by the national government each year calculated based on the most recent audited accounts of revenue received, as approved by the National Assembly.
This means that if approved, the Auditor General’s budget will increase by half to nearly Sh8 billion, from the last audited revenues collected by the national government of Sh1.59 trillion in 2018/19.
The Treasury allocated Sh5.53 billion to the office in the financial year 2020/21. This is against the resource requirement of Sh8.9 billion.
The National Audit Office has over the years asked Parliament and the Treasury for additional resources to enable it to build technical capacity, expand its presence in the counties, widen the scope and comprehensiveness of audits and motivate staff.
The State auditor says inadequate funding and delayed disbursements of budgetary resources affect the audit cycle.
The lack of proper funding also reduces the scope of the audit in terms of coverage and comprehensiveness.
The office says physical confirmations of the existence and utilisation of projects or programmes implemented throughout the country are most critical to auditing.
“This requires an independent and well-resourced audit office, with guaranteed availability of resources and optimal staffing, to enable efficient and effective execution of the audit cycle and to ensure continuous and sustainable audit operations,” said Auditor-General Nancy Gathungu.
The office, she said continues to devolve its services closer to the people through the establishment and expansion of regional offices to accommodate staff to address the audit needs at the county level.
The audit office has constructed new regional offices in Garissa, Kakamega and Eldoret, while construction works in Embu are ongoing as the auditor strives to enhance its presence in the counties for efficient, effective and economic delivery of audit services.
Plans for the construction of headquarters in Nairobi have, however, been delayed due to a lack of funding, said Ms Gathungu.
The lack of adequate funding for the office of the Auditor-General is likely to change if the 13th Parliament implements the recommendations of the outgoing House to ring-fence the budget at 0.5 percent of all audited revenue collected nationally.
“Amendment to Section 20 of the Public Audit Act 2015 by introducing a new sub-Section 3 to provide that “in reviewing of the budget estimates submitted…the Cabinet secretary responsible for Finance shall ensure that the allocation to the Office of the Auditor-General is not less than one-half percent of all the revenue collected by the national government each year calculated based on the most recent audited accounts of revenue received, as approved by the National Assembly,” said the Public Accounts Committee (PAC) in its report.
The Constitution mandates the Auditor-General to audit and report on the use and management of resources in all entities funded from public resources.
It further requires the Auditor-General to confirm whether public funds have been used lawfully and effectively.
The office is auditing more than 1,600 financial statements and carrying out performance, information systems and citizen accountability audits.
“The office will continue to make appeals to Parliament and the National Treasury for resources to enable enhancement of accountability across government,” Ms Gathungu says in the latest audit of the national government for 2020/21.
The report by PAC shows the office of the Auditor-General resource requirement for the financial year 2016/17 to 2019/20 stood at Sh35.1billion.
“However, the National Assembly approved a total of Sh21.2 billion representing a shortfall of Sh13.9 billion during the four years,” the report notes.
An analysis of the resource requirements against the allocation by the National Treasury and approval by the National Assembly shows that on average, the office of the Auditor-General received approximately 60 percent of its resource requirement.
Further analysis of the resource requirements by the office of the Auditor-Generals shows that the office requires approximately 0.5 percent of all revenue collected by the national government.
