Sh300bn missing, reveals audit

A third of the government’s expenditure for the last financial year cannot be accounted for, the Auditor General says in his yearly report of public spending.

Mr Edward Ouko told the National Assembly at a special session last evening that of the Sh920 billion spent by the government in the 2011/2012 financial year, Sh303 billion “can be regarded as not having been properly accounted for”.

In his presentation, Mr Ouko noted that of the 252 financial statements examined, only 15 (six per cent) could be deemed clean.

This was, however, an improvement from the previous year, where there were no clean accounts.

More than half of the statements examined had errors attributed to unsupported expenditure, failure by civil servants to surrender imprests, unauthorised spending and uncleared balances.

'PROBLEM WILL BE DEVOLVED'

They also had excess expenditure, misallocation of expenditure items and lack of adequate disclosures.

Mr Ouko warned that if not checked, this bad management of the government’s accounts could continue into the 47 county governments formed after the General Election in March.

“The situation will definitely be more complicated and intricate when county governments come on board as this problem will be devolved to all the 47 of them,” he said.

Overall, “there is weak and inadequate maintenance of accounting records observed across a number and ministries throughout the year,” noted Mr Ouko.

He said a number of financial statements from the ministries were different from the actual records.

In the 2011/2012 year, many ministries and departments prepared their statements on cash basis, making it impossible to tell what the government owns and owes.

“As at June 30, 2012 we do not, as such, know what each ministry or department owns and consequently the net worth of the Government of Kenya as a whole cannot be determined,” said Mr Ouko.

The Transition Authority has not made much progress in establishing the assets and liabilities of the national and county governments.

The Auditor General said the Sh303 billion could not be accounted for six main reasons.

These are unsupported expenditure, excess expenditure, pending bills, management of imprests, maintenance of bank and cash accounts and maintenance of accounting records.
Twenty ministries and departments could not produce documents to support the expenditure of some Sh5.2 billion.

Some Sh7 billion was spent in excess of the amounts approved by Parliament in four ministries and one commission — Roads, Justice, Education, Forestry and Teachers Service Commission.