Gathungu flags eight Cabinet secretaries for stalling audit reforms

Auditor General Nancy Gathungu./PHOTO:Office of the Auditor General

In a new report, Gathungu says their inaction has led to a near-total collapse in financial accountability at various state corporations under their watch.

The Auditor General took issue with the ministries for failing to operationalise and grant autonomy to 14 entities as directed by the National Assembly last February.

They include Health under former CS Susan Nakhumicha, Agriculture (Former CS Mithika Linturi), Mining (Hassan Joho), Trade (Lee Kinyanjui), Tourism (Rebecca Miano), Interior (Kipchumba Murkomen), ICT (William Kabogo) and Youth Affairs (Salim Mvurya).

MPs directed the ministries to operationalise the said entities so that they comply with the provisions of public finance laws.

"The continued failure by the respective Cabinet Secretaries to operationalise non-compliant state corporations has resulted in the persistent denial of their autonomy, as provided for in the enabling legislation," Gathungu stated.

The Health ministry was yet to give autonomy to the Tobacco Control Board, Mathari National Teaching and Referral Hospital and the Kenya Health Human Resource Advisory Council.

The Ministry of Agriculture was yet to actualise the Agricultural Information Resource Centre and the Animal Technicians Council.

“The non-compliance undermines financial autonomy in budgeting and appropriations, increasing the risk of misapplication of funds and failure to return unspent funds to the National Exchequer Account,” the report adds.

The Mining ministry has been reprimanded for failing to grant autonomy to the Kenya Fish Marketing Authority and Kenya Fishing Industries Corporation.

The Trade ministry was directed by MPs to grant the Consumer Protection Advisory Committee autonomy.

The National Heroes Council and the Kenya National Commission for Culture and Social Services are yet to be operationalised by the Tourism ministry.

The Executive Order No 1 of 2023 established the commission as a Semi-Autonomous Government Agency.

The Interior ministry is yet to grant independence to the Refugee Status Appeals Committee, while the ICT ministry’s inaction on the Media Complaints Commission and the Universal Service Advisory Council was flagged.

The Ministry of Sports is also in the spotlight for failing to put the Kenya Sports Development Authority to work independently.

"This lack of operationalisation undermines the intended purpose of these entities and poses a significant risk of public funds being misapplied within the respective line ministries,” Gathungu said.

The National Assembly had issued 90 recommendations targeting 23 state corporations that failed to prepare mandatory financial statements.

Despite the directives, only eight per cent of recommendations were fully implemented, with 68 per cent completely ignored.

"At least 63 per cent of the recommendations issued by the National Assembly were administrative in nature, with all of them being either partially or not implemented," the report notes.

According to the Auditor General, the ripple effect of ministerial inaction is severe.

Corporations like the Mathari National Teaching and Referral Hospital, which received Sh1.82 billion last year, told auditors it could not produce financial statements because its budget and staff were still controlled by the State Department for Medical Services.

"The hospital, therefore, must seek authority to incur expenditure from the Principal Secretary," its management explained, highlighting a direct consequence of the failure to grant autonomy.

Similarly, the Kenya Health Human Resource Advisory Council, the Kenya Fish Marketing Authority and the National Heroes Council all cited lack of operationalisation and clear mandates from their parent ministries as reasons for non-compliance.

Gathungu placed the blame squarely on administrative failures driven by the executives.

"This indicates that the identified audit issues are largely attributable to omissions and commissions of the Accounting Officers, rather than gaps in laws, regulations or policies."

The Auditor General wants accounting officers held responsible and for implementation of audits recommendations to be made part of their performance scorecard.

"The chief of staff and head of the Public Service should include implementation of audit recommendations as a key performance target for accounting officers,” Gathungu said.

The report also calls on Parliament to impose stronger sanctions and even consider "withdrawing funding from dormant or duplicative entities" under parent ministries.

If implemented, the move would directly impact the budgets overseen by the non-compliant Cabinet Secretaries.

INSTANT ANALYSIS

The findings shift the spotlight from the accounting officers of individual corporations to the highest levels of the executive, revealing a chain of command where ministerial lapses have bred systemic financial disobedience, leaving billions of shillings in public funds in a state of unverified expenditure.