Auditor General’s report: How to cut out the sound and fury that signifies nothing

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By Jason Lakin

Posted  Saturday, August 8   2015 at  11:57

In Summary

  • Beyond the reports, the role of other actors would also be different in my alternate universe.

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.

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