Six State-controlled institutions, including three companies listed on the Nairobi Securities Exchange (NSE), have failed to meet a deadline to publish their financial results for the year ended June due to a vacancy in the Auditor-General’s office.
The National Assembly’s Public Investments Committee (PIC) said the six firms had breached the law that requires publication of such results by September 30, although some had received regulatory approval to delay the release of their figures.
The affected institutions are the Central Bank of Kenya (CBK), the Capital Markets Authority (CMA), the Ethics and Anti-Corruption Commission (EACC), Kenya Power, KenGen and East African Portland Cement Company (EAPCC). The last three are listed.
State-backed firms and agencies must secure approval for reporting their financial results from the auditor-general, but the previous holder of that office, Edward Ouko, retired in August and his successor is yet to be named.
President Uhuru Kenyatta is yet to name the chief auditor although a shortlist of three candidates has already been presented to State House.
On Tuesday, the President appointed a new Controller of Budget to replace Agnes Odhiambo whose eight-year single term ended in August, the same date as Mr Ouko’s who had served as auditor-general since 2011.
“It is important to note that entities with statutory timelines to submit audit reports remain in breach of the law due to the existence of a vacancy in the office of auditor-general,” the PIC said in the report.
KenGen, Kenya Power and EAPCC had sought the approval of the CMA before November 30, 2019 or next Friday.
“As at the time of compiling this report, the committee could not confirm whether EACC had placed a request of extending its time limit for submission of audit reports to the National Assembly in line with Section 27(2) of the EACC Act, 2011,” PIC said.
Mr Kenyatta is expected to appoint the new auditor-general from the shortlist and forward the name to Parliament for approval.
It is not clear whether the process can be completed ahead of November 30 and allow the three firms to comply with the new publication deadline issued by the CMA. The listed companies are required to post their earnings by the end of this month, in line with market rules which stipulate that companies should publish their results within three months of the close of the review period.
The House committee is recommending changes to the Public Audit Act to provide for recruitment of an auditor-general to be concluded within three months of the expiry of a predecessor’s term.
Meanwhile, the committee is reviewing a request from the CBK for extension of the deadline for publication of its financial report for the year ended June.
The CBK, through acting Treasury Secretary Ukur Yatani had informed Parliament that it could not submit its audited books of accounts to the House due to the lack of a substantive auditor-general to sign them.