Treasury committed to financial reforms – Kinyua

November 6, 2012
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“The Treasury recognises that effective oversight mechanisms and appropriate governance structures contribute significantly to improved public expenditure management, which in turn contributes to sustainable growth and development,” he said/FILE

, NAIROBI, Kenya, Nov 6 – In order to improve efficiency and effectiveness in the accountability of public resources, the government is planning to build credible institutional capacity to provide oversight on public financial management systems.

Speaking at the opening of the Regional Internal Audit and Oversight Workshop, Ministry of Finance PS Joseph Kinyua explained that a robust and vibrant internal audit function can mitigate fiduciary risks, force weaknesses in internal control frameworks to be reported and put in place appropriate remedial measures.

“The Treasury recognises that effective oversight mechanisms and appropriate governance structures contribute significantly to improved public expenditure management, which in turn contributes to sustainable growth and development,” he said.

The PS cited the Public Financial Management Bill 2012 (PFM Act, 2012), as a significant milestone because it includes specific provisions mandating all public entities to establish both the internal audit function and audit committees.

The PFM Act, 2012 was assented to by the president on July 24 and it sets out to promote transparency and accountability in the management of public finances at the National Government and County Government.

“We hope that once the audit committees are re-constituted under the PFM Act, 2012, they will provide a framework through which oversight will be enhanced and in the process ensure that the PFM systems are credible and deliver the desired outcomes,” Kinyua said.

He added that the decentralisation and devolution of public services through devolved governance structures under Kenya’s new constitutional dispensation will require a profound realignment of the country’s PFM systems.

“Decentralisation of the management of public services together with adaption of the single Integrated Financial Management System has obvious benefits, however, implementation risks are also high” he said.

“We have identified a need to balance devolution with effective oversight mechanisms for it to be successful,” he added.

He explained that decentralisation is likely to be effective if it is implemented in an environment where the regulatory framework is clearly understood and monitored while managers are held to account for their actions.

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