Accountants raise red flag on spending of public finances

Accountants have called for speedy amendments to the public procurement law to include punitive measures for non-compliance as a way of safeguarding public funds.

During their annual symposium, the group said there is increased abuse of Public Procurement and Disposal Act 2005 by both the national and county governments.

According to the Institute of Certified Public Accountants of Kenya (Icpak) chairperson, Mr Benson Okundi, most procurement procedures are against article 227(1) of the Constitution that requires organs to procure in a fair, equitable, transparent, competitive and cost effective manner.

“NSSF and the standard gauge railway are cases in point where the law has been flouted costing Kenyans billions of shillings,” said Mr Okundi. “The misappropriations in public funds stand in the way of the Vision 2030 goal of achieving 10 per cent projected growth rate,” he noted.

Icpak pointed out that the act has been ineffective since there are current public procurement processes that are flawed; procedure for tendering the Sh1.2 trillion Mombasa-Malaba standard gauge railway projects and the Sh24 billion laptop project do not meet constitutional provisions.

Mr Okundi said it was shocking to note that the standard gauge railway contract to a Chinese firm was a government-to-government deal that is not subject to the Public Procurement and Disposal Act.

HARSH PENALTIES

“This is an encouragement to misuse of tax payers’ money; the Act should make provisions for all government procedures that involve the public to be highly scrutinised,” Mr Okundi said.

The institute wants the Act amended to include stiff penalties that will lead to strict adherence to procurement rules and regulations.

This would save the country from inquiries such as the ongoing one on the standard-gauge railway.

“It is important to put in place instruments for systematically assessing the performance of procuring departments,” the Icpak chairman said a press briefing yesterday.

“The Act must put in place regulations for constant public procurement audit and inspection,” he said.

According to Icpak council member Rashid Mohamed, stretching resources towards maintenance and development of new structures will no doubt slow down Kenya’s development rate.

“We call for prudence in public finance management; to save our economy in the midst of exposure to external shocks,” Mr Mohamed said.

“Uncertain global trends, fragile political situation in the sub-Saharan region, oil price increases and the blow from recession in the European Union coupled with our mismanagement of funds is a great setback to the economy,” he noted.

Since the Auditor-General and Controller of Budget have reported widespread misallocation of public funds, the accountants want the Act to make provisions for only qualified and certified public financial managers to handle public procurement processes.

WHAT THE ACT PROVIDES

The Act aims at establishing procedures for efficient public procurement and for the disposal of unserviceable, obsolete or surplus stores, assets and equipment by public entities and to provide for other related matters