Auditor-General, CoB could get powers to 'bite', more funding

The offices of the Auditor-General and the Controller of Budget could soon get powers to institute punitive measures on non-compliant government institutions, should Parliament approve a report by the Constitutional Implementation Oversight Committee (CIOC).

The report, already approved by the Committee, is now before the National Assembly and also calls for the creation of a law to ensure increased funding to the independent institutions to guarantee operational flexibility.

To bolster the impact and implementation of the audit reports by the Auditor-General, the House team now wants Parliament to amend the Public Finance Management Act, Cap 421A, to reconcile statutory deadlines with Article 229(4) of the Constitution.

“This amendment should require all public entities to submit financial statements within one month after the financial year-end, with clear penalties imposed on accounting officers for non-compliance,” reads the report.

“The legislative alignment is critical to eliminate reporting backlogs and restore effective parliamentary oversight.”

It also recommends the introduction of the Auditor-General Fund through the adoption of the Public Audit (Amendment) Bill, 2024.

In the interim, the Committee wants the National Treasury to consider bridging the Office of the Auditor-General’s funding gap from 0.20 per cent to 0.50 per cent of the national revenue, pending the passage of the Bill.

This, it noted, is because the office operates with diminished autonomy and lower institutional independence rankings compared to peer institutions in Uganda and South Africa.

“Concurrently, Parliament should prioritise enactment of the Bill to constitutionally guarantee minimum funding, establish the Office of the Auditor-General Fund for operational flexibility, and clarify jurisdictional mandates,” added the report.

Under the Office of the Controller of Budget (CoB), the MP Eric Muchangi-led Committee has called for an amendment to the Controller of Budget Act to grant enforcement powers to implement recommendations of the Controller of Budget, remove restrictions on economic reporting, and provide sanctions for violations.

“The National Treasury should implement the Office of the Controller of Budget–Central Bank of Kenya integrated payment system in order to track funds from approval to expenditure and ensure accountability,” submitted Muchangi.

The Committee further wants the Salaries and Remuneration Commission to review compensation for the CoB budget staff to enhance institutional capacity and prevent brain drain.

The recommendations were premised on findings that the CoB’s oversight mandate is severely undermined by legislative limitations and the absence of enforcement mechanisms.

According to the Committee, wasteful expenditure continues unabated across the counties despite the existence of oversight institutions — with the multiple unauthorised accounts indicating deliberate attempts to circumvent financial controls.

In the 2023/24 financial year, for instance, Controller of Budget Margaret Nyakang’o highlighted that 47 county executives engaged in travel expenditures totalling Sh284 million while pending bills accumulated.

There was also the procurement of unnecessary luxury vehicles by 23 ministries despite outstanding supplier payments, and further renovation expenditures exceeding Sh1.2 billion in 12 counties with unpaid medical suppliers.

And while tabling the report before the House for debate, Muchangi noted that underfunding of the Auditor-General and Controller of Budget’s offices represented the most “insidious” threat to constitutional governance.