Taxpayers have lost billions of shillings in the country due to the steady rise in the number of unaudited State organisations.
According to the newly published report by the Public Service Commission (PSC), from 2018/ 2019 to 2019/2020 financial year, the number of unaudited ministries, departments and agencies (MDAs) has nearly tripled.
This leaves gaps in the State of utilisation of public funds putting into question the safety of public funds.
“Across the public service, there was a steady rise in the number of unaudited organisations from 2018/2019 to 2019/2020 financial years and this puts into question the safety of public funds and levels of efficiency with regard to prudent utilization of public funds,” the PSC said.
The report shows that 19 per cent of evaluated MDAs had a positive opinion by the Auditor-General for the financial year 2019/2020, down from 31 per cent the previous year.
PSC has recommended a probe into the matter and review the underperformance in the public finance sector by June 2022.
“Government should constitute a multi-agency forum composed of oversight institutions in the public finance management sector to review the underperformance in the public finance sector by June 2022,” recommended the commission.
Financial audits of organisations are critical because they ensure that the financial records are a fair and accurate representation of the transactions they claim to represent.
The scope of public sector audits also ensures public entities’ accounts or other financial reports are prepared in accordance with a legally acceptable reporting framework.
It aims at ensuring efficient budget implementation and other decisions on the allocation of resources.
Further, it ensures policies, programmes or activities are defined by their legal basis or source of financing.
The end result is to create suitable conditions and reinforce the expectation that public-sector entities and public servants perform their functions effectively, efficiently, ethically and in accordance with the applicable laws and regulations.
To make a clarification, the role of the Auditor General is to certify that the reported statements of an entity are true and fair, and not to bust fraud schemes or identify financial crimes.
That is the domain of forensic audit. However, the Auditor General is empowered, with approval of parliament, to conduct forensic audits.
