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Kenya Auditor General details efforts to unravel public entity fraud – JURIST

Kenya’s Office of the Auditor General (OAG) Tuesday published its Annual Corporate Report for 2021 through 2022. In the report, the OAG detailed how it submitted 1,617 audit reports to Parliament and relevant country assemblies for further actions. Additionally, the OAG released a framework for tracking, following up and reporting on implementations of audit recommendations, and advanced its technical capacity through collaborations with different organizations.Out of the 1,617 audit reports, eight forensic audits examined the financial records of public entities to keep track of fraud with the use of the Audit Management System (AMS) while also establishing engagements with the French Court of Accounts and other investigative agencies to raise audit capacity. Six of the audits assessed the efficiency and effectiveness of government programs, management systems and procedures, and were submitted to Parliament for deliberation and further action.Despite a slight increase of 0.5 percent of public entities that showed slight omissions and misstatements in their financial records, the report showed an overall improvement over the past year. There was a 2.5 percent increase in the number of public entities that could present their financial statements “fairly [and] all material respects the operations of the entit[ies].” The number of entities that showed significant and serious discrepancies between their financial statements and account records dropped by 2 percent and 1 percent respectively.The OAG has also engaged stakeholders in an ongoing review of the Public Audit Act 2015, established a litigation database to keep track of case progress, a database to enhance the management of contracts, and mechanisms to ensure legal documents served are accessed on time.Pursuant to section 50(2) and 53(1)(a) of the Public Audit Act 2015, the Parliament or relevant county assembly shall consider the report and take appropriate action. Parliament should then pass the recommendations to the relevant accounting officer of a state organ or public entity to take relevant steps to implement the recommendations. However, the Parliament has raised concerns over the years about the effectiveness of the following up mechanism which often leads to the recurrence of audit queries in later reports.The Auditor-General, CPA Nancy Gathungu, CBS, said the office submitted recommendations to Parliament to put the Public Finance Management Act 2012 under review and mandate the implementation of audit recommendations for all public entities by introducing sanctions for those who failed to comply. The OAG has already developed an internal framework to track, follow up, and report the implementation progress of institutions. But the Auditor-General stressed that collaborations between oversight and investigative agencies are vital in improving the livelihoods of Kenyan people. Gathungu said:We can achieve our Constitutional mandate if we work together. And one of the key areas to collaborate and partner is in the follow-up of audit recommendations. I invite all of you to join us in this journey[.]Gathungu also proposed the set-up of a consultative forum made up of Heads of Constitutional Commissions and Independent Offices (CCIOs) to institute structures for cooperation to enhance the implementation of recommendations.