Delayed approvals of state audits hurting counties, ICPAK


Delayed approvals of state audits hurting counties, ICPAK
ICPAK Chairman FCPA Julius Mwatu addresses members during the 27th Economic Symposium by the accounting institute

In Summary

  • ICPAK views the reliance on obsolete 2013/14 audited financial statements as the base to the division of revenue between national government and counties as disadvantageous to the devolved units where surpluses accrue only to the national government.
  • The Institute has urged parliament to consider the prompt approval and adoption of the most recent financial statements by the Office of the Auditor General (OAG) to enhance the accountability of public funds.
  • The audited and approved revenue for the 2013/14 fiscal year is estimated at Ksh. 935.7 billion while the total shareable revenue between the two levels of government stands at Ksh. 1.7 trillion for the ongoing 2018/19 financial year.

The Institute of Certified Public Accountants of Kenya (ICPAK) has expressed concerns of the potential under-performance of the national budget.

This comes as Parliament continues to employ obsolete audits as the base for the division of revenue between the national government and counties.

According to the institute, Parliament’s reliance on the 2013/14 audited financial statements over the past three years has disadvantaged county governments as budget surpluses accrue back to the national government.

This is in spite of the availability of audited reports to the 2016/2017 financial year from the Office of the Auditor General (OAG) which currently lie in parliament unapproved.

“We urge the National Assembly to consider, expedite scrutiny and the adoption of these reports from the Auditor General. This will ensure revenue share relies on the most recent and approved financial statements while enhancing the accountability of public funds on a timely manner,” said ICPAK Chairman Julius Mwatu.

The Division of Revenue Act has since 2014 employed the audited and approved revenue for the 2013/14 fiscal year estimated at Ksh. 935.7 billion to determine allocations to both national and county governments with Ksh. 1.7 trillion representing the total shareable revenue between the pair in the 2018/19 financial year.

ICPAK stance on the use of compiled financial statements by Auditor General Edward Ouko comes on the back of the newly advertised tender to audit the auditor general’s reports by the National Assembly clerk even as indifference remains rife between the auditor’s office and parliament over the proposed oversight function.

Mr. Mwatu who vacates office as ICPAK chair in June, has backed the institute to churn out a suitable candidate for the daunting task.

“The Institute has enough competent and professional auditors within its reach to audit the Auditor General in line with the prescribed professional standards and is willing and ready to offer support to the National Assembly in auditing the OAG in the interest of the public,” he said.

Meanwhile, ICPAK has recommended the creation of a national tax policy to shape the modernization of the prevailing tax regime.

The institute has backed the policy to identify gaps to optimal revenue mobilization equating it to the counties own Source Revenue Bill which is currently under the consideration of the devolved units.

In-house, the accountants institute is in pursuant of multiple composite licenses for its over 23,000 members to offer distinction to the nearly 10 specializations in accountancy following amendments to the Accountancy Act in an effort to strengthen integrity and professionalism in the industry.

The Institute is similarly exploring fees guidelines to guide the fair remuneration of accounts practitioners and membership protection guidelines to supplement the formulation of the Whistle-blower’s Bill which serves to protect informants of graft and malpractice in the professional world from persecution

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Story By Kepha Muiruri
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