Accountants demand internal audit of all county governments to foster governance

The accountants’ professional watchdog wants County governments to establish internal audit committees as provided for by the law. The Institute of Certified Public Accountants of Kenya (ICPAK) said that internal audit units would ensure public finances were utilised prudently and efficiently at the counties.

Vice Chairman Fernandes Barasa said the absence of those units had constrained the process of monitoring how public money is spent by the devolved units.

“The institute is concerned that the advice by the Controller of Budget is largely ignored and some devolved units continue to use public funds in total disregard to Public Finance Management Act and other existing laws,” said Barasa while addressing the media on the sidelines of the Public Finance Management conference at White Sands Hotel in Mombasa on Wednesday.

He said County governments should establish an internal audit function in compliance with section 155 of the PFM Act, saying the body was concerned that the devolved units have disregarded recommendation from the Auditor General to do so.

“During the monitoring of Budget implementation, the office of Controller of Budget noted that some Counties are yet to establish an internal audit function as provided for in Section 155 of the PFM Act,” said Barasa.

The PFM Act sets the rules for how governments at national and county levels can raise and spend money and the accountants body said that the county internal audit units plays an important role on the same. He said implementation of the Act would curb rising cases of graft that would eventually hamper realization of the development agenda of the counties.

“We are also concerned by non-compliance with Salary and Remuneration Commission’s Circulars on Remuneration and benefits of public Officers. For instance, according to the Auditor-General report some officers are paid monthly commuter allowances despite having been assigned official vehicles. This is in contravention of the SRC circulars,” said the ICPAK Vice Chairman.

County Treasuries

He said all monies paid to county officials in contravention of the SRC circular should be recovered. On the adoption of the Integrated Financial Management Systems (IFMIS), he said that although many County Treasuries have adopted the system, financial operations in some County Assemblies still remain manual.

“Failure to adopt IFMIS by County Assemblies is contrary to Section 12(1) (e) of the PFM Act and limits transparency in financial management and standard financial reporting as contemplated by Article 226 of the Constitution,” Barasa said. He added that law requires counties to ensure all locally generated revenue is deposited intact into County Revenue Fund before expenditure (CRF).

The Auditor General Report for the first half of 2014/15 cited six counties (Nairobi City, Homa Bay, Machakos, Murang’a, Meru and Trans Nzoia) that reportedly had higher expenditure than the amounts approved by the Controller of Budget.