The Budget and Appropriations Committee has endorsed proposals to establish an independent financing framework for the Office of the Auditor-General, alongside calls for stronger enforcement of audit recommendations and improved controls on public revenue collection.
The move follows scrutiny of the 2026/27 Budget Estimates where lawmakers raised concerns over delayed audits, widening backlogs, and persistent revenue leakages in county governments.
The Chair, Samuel Atandi said the current funding structure compromises institutional independence, noting that the audit office should not compete for resources with entities it audits.
Independent Financing Model Proposed
The Committee signaled support for a structured financing model anchored on a fixed percentage of audited national revenue to enhance the Auditor-General’s independence and operational efficiency.
Lawmakers argued that predictable funding would strengthen oversight capacity and reduce dependence on annual budget negotiations that often constrain audit priorities.
The Office of the Auditor-General warned that its mandate continues to be constrained by inadequate funding despite a rapidly expanding audit universe covering more than 12,000 entities.
Deputy Auditor-General Isaac Ng’ang’a told MPs that the institution is currently managing a backlog of over 8,150 unaudited financial statements, with planned audits scaled down due to resource limitations.
Revenue Accountability and County Systems
David Ochieng raised concerns over weak linkages between audit findings and performance outcomes, particularly in county governments where cash-based revenue systems continue to create risks of under-reporting and leakages.
Makali Mulu questioned whether the country has a clear estimate of county revenue potential and why persistent under-collection continues despite repeated audit findings, prompting the Auditor-General’s Office to cite previous Commission on Revenue Allocation estimates and call for stronger policy alignment to improve own-source revenue performance.
Strengthening Enforcement of Audit Recommendations
The Office also proposed amendments to the Public Finance Management framework to introduce administrative and legal sanctions against accounting officers who fail to implement audit recommendations, arguing that enforcement remains a key weakness in public financial accountability.
On education audits, the Auditor-General’s Office called for alignment of reporting timelines for public schools and TVET institutions with the academic calendar, proposing December as a reporting period to improve accuracy, reduce reconciliation challenges, and ease pressure on audit cycles.
The Budget Committee also urged broader reforms to strengthen enforcement of audit findings, accelerate performance audit reviews, and enhance oversight of public expenditure to curb wastage and improve transparency across government institutions going forward across all public sectors generally.
