Is it possible to imagine a better way of managing the annual circus of the release of the Auditor General reports in Kenya? What would an alternate audit-accountability universe look like?
Change would start with the reports produced by the Office of the Auditor General (OAG). These reports are the main tool by which the OAG communicates with parliament and the public.
They are meant to set in motion a series of actions, which begin with parliament’s review of the report and the calling of accounting officers to explain anomalies identified.
As a communication tool, however, these reports could do much more to direct parliament on where to focus its attention.
As Kamotho Waiganjo noted in The Standard on Sunday, August 2, not every unprocedural action taken by government is necessarily associated with the loss of funds. Failure to follow procedures opens the door to abuse, but is not the same as misuse.
The OAG report should focus attention on the highest value, most significant losses or potential losses of public funds. It should differentiate between occasional and systemic failures to follow procedure.
It should also differentiate between apparent theft and procedural misdeeds. When both seem to have occurred, that should be clear.
The reports must also be clearer about the numbers they are discussing. For example, media reports recently highlighted a figure of Ksh450 billion, referring to those government statements that received a qualified opinion.
This figure appears at the bottom of a summary of the reasons why department statements were qualified in the OAG report. However, it does not match the total figure of qualified statements in a summary table elsewhere, showing Ksh603 billion. These discrepancies are not well explained in the report and can undermine its credibility.
Beyond the reports, the role of other actors would also be different in my alternate universe.
While the National Treasury complained last week that the reports were unfair to them because they did not take into account all of the information that had been made available to the auditor, they took no responsibility for the delay in preparing financial statements for audit, or supplying proper documentation in the first place.
The audit process is annual and predictable. Shouldn’t executive agencies be prepared for it and have documentation readily accessible?
In past discussions with the OAG, the latter have complained that statements for audit are presented to them that are inaccurate or incomplete and then revised as many as nine times while they are auditing them.
Does the executive really believe they have no role to play in providing timely and accurate statements on a regular basis?
Having said this, media reporting on audit would also be of a wholly different character. I have already made clear the need to distinguish between procedural challenges and actual misuse of funds in my previous column.
But there is more the media must do. Related to the point made by Treasury, it is often the case that agencies fail to produce proper records in time for the audit.
However, by the time the report is taken up by the Parliamentary Public Accounts Committee, a number of these issues have been resolved.
Whose responsibility is it to track over time how much of the billions singled out by the auditor remains unresolved after parliament has stepped in to play its role in the process?
Currently, the media runs a headline story emphasising “billions” in “plunder,” but never follows up to see how much is actually not accounted for after parliamentary review.
This has the perverse effect of making things seem worse than they are while reducing focus on the truly egregious cases that demand further attention.
The media should also offer proper context, such as identifying performance trends showing that the share of statements disclaimed (meaning the OAG could not even offer an opinion due to shoddy record-keeping) dropped from 25 per cent to 9 per cent since last year, and the number of clean statements increased from 12 per cent to 26 per cent.
And what of parliament? The report produced by the Public Accounts Committee is the second most important document produced in the audit-accountability process.
It is meant to highlight the most critical unresolved issues from the audit report and indicate how these are being dealt with.
Generally, these reports are excessively long, fail to highlight the most urgent issues, do not summarise what has been resolved and what is still unresolved, and contain repeated warnings every year to accounting officers that seem not to be acted upon.
They show that many issues are resolved even before parliamentary intervention, but do little to demonstrate parliamentary or executive action on unresolved issues.
Moreover, parliamentary oversight of the budget should not start and end with audit reports, but should be a continuous process of reviewing implementation every quarter.
Jason Lakin is Kenya country director for the International Budget Partnership. E-mail:[email protected]