State accountants on the spot over poor financial records

Government accountants have been put on notice for failing to keep proper financial records.

The Auditor General says this has led to a situation where the government has no credible records of its assets or debts.

This worrying state of affairs is captured in the Auditor General’s report presented before the Public Accounts Committee (PAC).

“We do not know the true position of GOK (the government of Kenya) assets and liabilities as at 30 June 2011, 2012 and even 2013, we will not know,” the statement states in part.

No credible record

The report says that the government lacks a credible permanent record of government assets such as vehicles, roads and dams among others.

According to the Auditor General, even where the record of statement of assets and liabilities is kept, it “does not make sense since it is incomplete.”

On the ministries’ record-keeping, the Auditor General says the financial records are unreliable as they are maintained in accordance with the Treasury guidelines and circulars which are “out-dated and to a large extend ineffective.”

“Various ledgers and trail balances for 2010/2011 against which the financial statements are drawn were incomplete, missing or full of errors,” the Auditor General says.

As a result, out of the 173 financial statements audited, only 29 per cent were certified, meaning the auditors were able to form an opinion, while the remaining 71 per cent were rejected.

Speaking to the Nation in an interview, the Controller of Budget Ms Agnes Odhiambo pointed out that government ministries, departments and agents should maintain a record of fixed assets, their current value and their depreciation

“Government entities are supposed to maintain fixed assets registers. These registers should show the movement in the asset categories. For instance, if you buy a vehicle, it is recorded. You also keep a record of the depreciation value and if it is disposed of, it is removed from the records,” Ms Odhiambo said.

She, however, said that setting up a public sector finance watchdog to streamline the accounting record procedures in all government ministries, departments and agencies was long overdue.

The establishment of the Public Sector Accounting Standards Board, which is spelled out in the Public Finance Management Act 2012, is currently on going and will provide oversight on how public funds are managed and used by various government entities.