Auditor-General raises queries over Sh337bn

Written By Michael Maunda on Friday, July 18, 2014 | 1:23 AM

Auditor-General raises queries over Sh337bn
Kenya Auditor-General  Edward Ouko raises queries over Sh337bn
The government cannot confirm whether Sh337 billion spent in 2012/2013 was used lawfully as required by the Constitution, the Auditor General has said in a new report that paints a grim picture of how taxpayers’ money is used.
According to the report tabled in the National Assembly on Thursday by Majority Leader Aden Duale, the Sh337 billion came from 130 financial statements with adverse and disclaimed opinions out of 343 statements scrutinised.
The Auditor General’s report will now be scrutinised by the Public Accounts Committee, which invites accounting officers in each ministry to answer the queries raised.
An adverse opinion from the Auditor General means that the accounts were incomplete or misleading, and he could not establish whether the money was spent lawfully and in an effective manner.
It also means that the auditor cannot arrive at any meaningful opinion from the scrutiny of the statements. There were 45 statements with adverse opinion, representing 13 per cent of those studied by the auditors.
Among ministries and departments that failed to provide documents to support their expenditure for a total of Sh33.9 billion were; Internal Security, State House, Foreign Affairs, Home Affairs, Planning, Defence, Information and Communication  and Education.
Mr Ouko said the audit covered “authorisation and approval of expenditure, budget procedures, management of bank accounts and a review of the internal control systems” set up by the ministries and other agencies.
The report also reveals that only 17 per cent of the money allocated in the Budget was spent on development. This represented a reduction by 10 per cent compared to the 2011/2012 financial year. The amount was way below the 30 per cent target that would have fuelled economic growth.
Mr Ouko blamed the failure to account for the Sh337 billion on “weak and inadequate” maintenance of accounting records in ministries and departments during the year. There was also a perennial problem on the maintenance of bank and cash accounts, poor management of imprests and cases of expenditure without the approval of Parliament.
When the report was tabled in the House, Speaker Justin Muturi asked the Public Accounts Committee (PAC) to speed up the scrutiny of the reports because the money devolved to counties is calculated based on the latest audited accounts.
PAC, which is chaired by Budalang’i MP Ababu Namwamba, is currently scrutinising the report from the 2011/2012 financial year. The team aims to have its scrutiny and recommendations on government spending influence Budget allocations for ministries in the future so that those that have wasted or not accounted for funds get less.
Unlike last year, when Mr Ouko read the summary and then tabled the reports in the House, there was no formal presentation and Mr Duale tabled the report like he does other papers.
The formal presentation on live TV was meant to lend to the report the significance accorded to the reading of the Budget statement by the National Treasury Cabinet Secretary.
Despite the reported failures in accounting, the Auditor General notes that the number of clean statements has increased from 15 in 2011/2012 to 41 in 2012/2013. The other positive news was that excess expenditure incurred without the approval of Parliament totalled Sh38.4 million, down from Sh7 billion the previous year.
There was also a high absorption rate for Budget funds at 90 per cent.
The report also reveals that although in its Budget statement the government had indicated that it intended to spend Sh1.23 trillion, the actual amount spent was Sh1.11 trillion. This is an increase of Sh194 million from the previous financial year, when Sh920 million was spent.
Of the Sh1.11 trillion, Sh611 billion was spent on recurrent expenditure, Sh190 billion was spent on development and Sh312 billion on the Consolidated Fund Services.
The Consolidated Fund is the principal government account into which all government revenue is deposited and whose expenditure must be approved by Parliament.
According to Mr Ouko, recurrent expenditure increased by Sh118 billion and Consolidated Fund Services by Sh97 billion but development expenditure dropped by 10 per cent.
“It is unfortunate that development expenditure not only decreased by 10 per cent compared to last year (2011/2012) but was also 17 per cent of the total expenditure which falls below the target threshold of about 30 per cent recommended for the country’s economic growth.”
Development expenditure also had the highest under-expenditure at Sh67 billion, with the recurrent vote also failing to spend Sh22 billion.
The Consolidated Fund Services had an under-expenditure of Sh33 billion.