Parliament in stand-off with Ouko office external auditor

Auditor-General Edward Ouko (left) and National Assembly Majority Leader Aden Duale. PHOTO | FILE
Auditor-General Edward Ouko (left) and National Assembly Majority Leader Aden Duale. PHOTO | FILE 

Parliament has set in motion the process of hiring a second firm to review expenditure records in Auditor-General Edward Ouko’s office, barely one year after another firm bagged a three-year contract to do the job.

Companies seeking to be recruited as external auditor for the Kenya National Audit Office (Kenao) have up to October 19 to submit tender documents, Parliament said in the noticed published in local newspapers.

“The National Assembly shall facilitate the Consultant in ensuring that Kenao provides unobstructed access of all offices and locations involved in carrying out the services,” the tender documents published last week said.

The move comes just weeks after Majority Leader Aden Duale indicated that the Jubilee Party would use its first sittings in the House — where it enjoys a near absolute majority — to push for the removal of Mr Ouko from office.

Mr Duale yesterday said the contract awarded to Baker Tilly Merali as Kenao’s external auditors expired with the 11th Parliament, but the firm insists it remains valid.

“The other contract expired with the end of 11th Parliament on the midnight of August 7, 2017. We have advertised because this is a new Parliament and we must as a House have a new process to pick the external auditor to audit the Auditor General’s books of accounts,” Mr Duale said in a telephone interview.

The external auditor is supposed to make its recommendations to Parliament after inspecting Kenao’s books for the financial years 2014/15, 2015/16 and 2016/17.

Bad blood

The ongoing recruitment of a second external auditor looks set to escalate the bad blood between Kenao and the Jubilee government, which began last year when government-leaning MPs launched an onslaught against Mr Ouko, accusing him of presiding over procurement malpractices and failing to submit reports on time.

A private petitioner, Emmanuel Mwagonah, also accused Mr Ouko of accumulating a Sh1 million phone bill on his iPad while he was abroad, and irregularly allocating some of his official cars to his wife and daughter.

Mr Ouko has denied the charges arguing that his accusers are driven by malice. Last year, MPs protested the hiring of Baker Tilly Merali as Kenao’s external auditors for three years starting November.

The MPs accused Baker Tilly Merali of doing other consultancy jobs for Kenao leading to concealment of key adverse information, something that both Mr Ouko and the firm’s managers have denied.

But Baker Tilly Merali managing partner Madhav Bhandari said last Friday that he was unaware of the planned recruitment of a new firm, signalling a possible legal battle with Parliament that could expose taxpayers to bills running into millions of shillings.

“As far as I am concerned, we are the legally appointed external auditor of the Kenya National Audit Office for the next three years,” Mr Bhandari said. “We have an appointment letter to that effect but I have not received any communication advising us otherwise.”

He, however, added a rider that opens the lid on the underlying tension with the 11th Parliament.

“We have not started our work because Parliament is yet to give us the go-ahead as to the scope and when to begin,” he said.

Parliament says in the latest tender documents that the external auditor will not only review financial records to advise whether they have been kept to the required standards but will also examine the probity of contracts, agreements, and memoranda of understanding signed in the past three years.

The House also wants the auditors to test Kenao’s compliance with various government circulars, including the spending and travel guidelines issued from time to time by the Treasury and the Head of Public Service.

'No consultation'

On Friday, Mr Ouko appeared to indicate that the MPs did not consult his office.

“I have nothing to do with that recruitment of an external auditor for my office,” he said in a text message.

Mr Ouko was appointed to head Kenao on August 27, 2011, following the passage of the 2010 Constitution.

He came from the African Development Bank (AfDB) where he worked for 24 years, rising steadily through the ranks to become the auditor-general and the bank’s main officer in charge of the anti-corruption and fraud investigations.

Prior to joining AfDB, Mr Ouko worked in London and Nairobi for Deloitte, Haskins and Sells, one of the Big Six accounting firms in the world then, as a staff accountant and later audit manager at Deloitte’s Kenya office.