MPs hire audit firm to look into Auditor General's expenditure

The financial spending of the Office of the Auditor General, led by Nancy Gathungu, will be scrutinised following the approval by Members of Parliament for an independent audit firm to review the office's expenditures.

The National Assembly approved the appointment of PKF Kenya LLP, an external auditor, to analyse the accounts for the financial years 2022/2023, 2023/2024, and 2024/2025, as well as the financial statements for the Staff Mortgage and Car Loan Scheme.

The decision to have spending by Gathungu's office scrutinised follows a recommendation by the Public Accounts Committee (PAC), which has been instrumental in advocating for increased funding for the OAG over the past five years.

In its report, the Committee detailed the crucial role of the Office of the Auditor General in auditing public fund usage, emphasising that its reports have been vital for MPs in performing their oversight duties.

Speaking while moving the motion, Committee Vice Chairperson, Hon. Tindi Mwale, indicated the Committee's resolve to support the Office of the Auditor General with the resources it needs to strengthen its capacity in auditing.

"The Public Accounts Committee has been at the forefront of advocating for funding for the Office of the Auditor General," Mwale, who also serves as Butere MP, stated. 

The lawmaker also pointed out the significance of the external audit in ensuring transparency and accountability in the management of public resources.

Funyula MP Wilberforce Oundo explained that while the Auditor-General is responsible for auditing the government, the sheer volume of work often necessitates outsourcing certain tasks to external audit firms.

He emphasised the importance of selecting a firm with the highest professional standards. Members of the House expressed confidence in the procurement process and directed the appointed firm to ensure that it adheres to international auditing standards.

The appointment of PKF Kenya LLP, according to the MPs, is in line with the provisions of Article 226(4) of the Constitution and Section 43 of the Public Audit Act.

Auditor General Nancy Gathungu addresses journalists during the official opening of the African Organization of Supreme Audit Institutions (AFROSAI-E) Governing Board meeting in Kampala in May 2024. (Photo: Office of the Auditor General)

Gathungu has been protesting the sheer underfunding of her office by the Treasury, lamenting that the budget cuts are a setback to achieving the role of the office.

For instance, last year, she decried underfunding, saying her office is unable to fulfil its mandate promptly as envisaged by the Constitution.

In a report to the Budget and Appropriations Committee, Gathungu said her office has continuously been underfunded over the years, despite the office's enhanced mandate and increased number of public sector entities.

She said the office has a shortfall of Sh1.79 billion in the current financial year (2022-2023). Gathungu said in the 2023 Budget Policy Statement that the office has been allocated a budget of Sh7.753 billion, (comprising a recurrent budget of Sh7.283 billion and a Development Budget of Sh469.88 million.

She said her office had made a budget request of Sh11.39 billion (comprising a recurrent requirement of Sh10.34 billion and a development requirement of Sh1.05 billion).

"This leaves the office with a total shortfall of Sh3.64 billion recurrent, Sh3.06 billion in development, and Sh580 million," she said.

"We are requesting Sh2.5 billion out of the shortfall of Sh3.63 billion to cater for additional audit scope and other critical areas of our operations."

Gathungu reiterated that the shortfall has negatively affected their work and that they cannot wholly confirm the lawfulness or effectiveness of the use of public funds for the remaining public sector entities for the financial year 2021/2022 in accordance with constitutional requirements.

The Office of Auditor General, despite being responsible for auditing and reporting on the entire national budget, only receives an average of 0.20 per cent of the national budget.