This archive report was first published on 12 December 2019.
On December 11, 2019, the Institute of Certified Public Accountants of Kenya (Icpak) presented a proposal to the Senate Finance and Budget Committee on the allocation of funds to counties. The proposal suggested that counties that do not receive a clean bill of health from the Auditor General should be penalized by reducing their funds' allocation every financial year.
According to Icpak, financial prudence should be a key consideration in the allocation of funds to counties. The current formula, which will be applied until June 2024, assigns a weight of 2% to financial prudence. However, Icpak proposed that this weight should be increased to 15% to encourage governors to be more responsible in handling public money.
Under the proposed formula, counties that do not receive an unqualified opinion from the Auditor General would miss out on the funds allocated using these criteria. Only two counties, Makueni and Nyandarua, which received unqualified opinions, would get the full allocations.
Speaking during the presentation, Icpak Public Policy and Research Manager Elias Wakhisi said, 'On audit reports, we note qualified opinion has been assigned a score of two, yet this is a type of a modified opinion. It means that the Auditor General was unsatisfied with the veracity of certain expenditure.'
Icpak also proposed modalities to force counties to reduce their expenditure on salaries, which accounts for the bulk of recurrent budgets. The institute suggested that the country adopt international standards where only 40% of recurrent expenditure should go to paying salaries.
