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Audit Profile: The Office of the Controller and Auditor
General - Kenya

By Mr. D.G. Njoroge, Controller and Auditor General

The Office of the Controller and Auditor General was established in 1955, while Kenya was a British Colony, through the Exchequer and Audit Ordi­nance which stipulated the duties and powers of the office. In 1963, when Kenya attained independence, the Ordinance was amended to become the Exchequer and Audit Act under which the Kenya Audit Office now operates.

The Role and Duties of the Office

The Kenya Constitution defines the duties of the Office of the Controller and Auditor General in broad terms, and more detailed responsibilities are provided in the Exchequer and Audit Act. Specifically, the Controller and Auditor General, who is appointed by the President, is charged with:

• reviewing proposed withdrawals from the Consolidated Fund and, if satisfied that they are authorized by law, approving the with­drawals;
• examining disbursements of monies appropriated by Parliament to ensure that they have been applied to the purposes to which they were appropriated and that expenditures conform to the authorities that govern them; and
• auditing and reporting on the public accounts of the Govern­ment of Kenya, the accounts of all government officers and au­thorities, the accounts of all courts and commissions, and the ac­counts of the Clerk of the National Assembly.

The Exchequer and Audit Act further requires that the Controller and Auditor General audit and report on all accounts of the local authorities.

Independence

Independence of a supreme audit institution (SAI) is a necessary element of effective auditing, and this principle is clearly recognized in Kenya where the Office of the Controller and Auditor General is independent of the executive. This independence is guaranteed by the constitution which states that "..In the exercise of his functions, the Controller and Auditor General shall not be subject to the direction or control of any other person and authority". The constitution also guarantees the Controller and Auditor General access to any information and records that may be required to perform the duties as­signed to the office.

Organization and Staff

The Controller and Auditor General is assisted in performing his constitutional duties by the Director of Audit, the Deputy Director of Audit, and Assistant Directors of Audit, Branch Heads and the audit staff. Currently the S AI of Kenya has a staff of 546, made up of 404 auditors and 142 support staff. They are organized in seven major divi­sions, each managed by an Assistant Director of Audit. Except for the Training Division, each of these divisions is made up of several branches under supervision of a Branch Head. The 25 branches in the capital city of Nairobi are each responsible for auditing one or two ministries, depending upon the size of the ministry. An additional 14 branches carry out the audit work in the seven provinces.

Nature and Scope of Work

The legislation under which the Kenya Audit Office operates does not limit the scope of audit that may be carried out by the Controller and Audi­tor General except in the area of policy. The scope of audit work done is, there­fore, determined by the office although it is dependent on the audit resources available, the staff strength, and the expertise required.

Planning the audit work to be done by the Kenya Audit Office, is the responsibility of the head office. How­ever, detailed planning on implementing the overall audit plan is the responsibility of the branches which must carry out the actual audit. The branches pre­pare monthly audit programs which are forwarded to the head office to keep them informed of the progress made in the audit plan.

The Audit Office carries out compliance and financial audits. Routine audits are underway throughout the year to ensure that government expen­ditures and revenues are properly accounted for in accordance with laws and regulations. However, due to the fast growth of government business in recent years, it has not been possible to do detailed audits on all transactions, so audit sampling techniques are applied. The SAI also audits the government's Annual Financial Statements. In both cases, unsatisfactory matters are included in the Annual Report to the Parliament.

Reporting

The constitution requires the Controller and Auditor General to report to the Parliament at least once every year on the public accounts of the government. Important audit findings arising from audits carried out during the year, including the financial state­ments, are reported to the ministries through management letters issued im­mediately after the audit work is completed. Matters which cannot be satisfactorily resolved are included in the Annual Report. In addition to the Annual Report, the Controller and Audi­tor General is empowered to present a special report to the Parliament at any time on any matters related to his pow­ers and duties. Matters reported to the Parliament are discussed by the Public Accounts Committee which makes the necessary recommendations which Parliament may adopt. Recommendations adopted by Parliament are then passed on to the government for implementa­tion. The Controller and Auditor General has no powers to enforce the recommendations, and may report instances where recommendations made and adopted by the Parliament are not implemented.

Staff Training and Programs

Recognizing the importance of developing knowledge and skills, the Kenya Audit Office has adopted a four part approach to training the staff it has recruited. Staff development is accomplished through:

• external training provided by the SAIs of Canada, the United Kingdom, and the United States, and organizations such as the Chartered Institute of Public Finance and Accountancy;
• internal training obtained through the local Government Training Institutions where staff members complete coursework leading to the Certified Public Accountant (CPA) examinations;
• in-house training developed by the office's Training Division or adapted by the Training Divi­sion from courses obtained from other SAIs; and
• private tuition pursued by staff members completing coursework at private institutions. As an in­centive, those staff members who pass examinations in private programs are given a cash bonus and refunded 50% of expenses incurred.

This four part strategy has been successful in significantly improving the quality of staff performance and is only constrained by the limited opportuni­ties available for external and internal training.

The Kenya Audit Office has also, in the last three years, been an active supporter of and participant in the training seminars sponsored by the INTO-SAI Development initiative (IDI). IDI's Human Resource Management Seminar, the Training Managers Workshop, and the Computer Audit Workshop have provided opportunities for the staff to receive high quality professional training and exchange ideas with counter­parts from other countries.

Looking Ahead

The audit office has been carrying out value-for-money (VFM) related audits, but due to lack of sufficient, well trained staff, the office has not been able to adopt the structured approach to VFM auditing which clearly differenti­ates VFM issues from others, particu­larly for reporting purposes. This is an area which will be strengthened as qualified staff are more readily available.

Currently, the office has a small microcomputer section which has been useful in areas of data analysis and word processing. The office is, however, eager to expand the computer services to other areas of audit operations and systems analysis. One goal is to link the SATs microcomputers with the govern­ment mainframe computer, but a lack of adequate resources and trained staff has, once again, been a constraint. With assistance from other SAIs, especially those from the United Kingdom and Canada, the Kenya Audit Office is work­ing to overcome these constraints and expand the capabilities of its staff and improve its operations.