According to the document, only Sh55.2 billion of the Sh920 billion the government spent can be accounted for.
Auditor General Edward Ouko said that more than half of the statement errors were due to unsupported expenditure, failure by civil servants to surrender imprests, unauthorised spending and uncleared balances.
“A total of 252 financial statements were audited and only six percent had clean (unqualified) audit reports, 51 percent had qualified opinion reports, 10 percent had disclaimer of opinion reports and 33 percent had disclaimer of opinion reports. A trend that is worrying is that 33 percent of the financial statements or 83 financial statements cannot be regarded as having been properly accounted hence a disclaimer of opinion,” he stated.
In the report, Ouko explained that there were no supporting documents for Sh561 billion which could have resulted in the misuse of the funds.
“Of major concern is the poor maintenance of accounting records. As in the previous years and as also indicated in my report, there is weak and inadequate maintenance of accounting records observed across a number of ministries and departments during the year,” he said.
He said that in the 2011/2012 year, many ministries and departments prepared their statements on cash basis, making it impossible to tell what the government owns and owes.
“In addition, the ministries and departments continued to prepare their respective financial statements on Cash Basis of accounting as instructed by the Treasury. This implies that capital assets are expensed as a result of which Statements of Assets and Liabilities as at the end of each financial year do not show a complete and true and fair view of the ministry’s or department’s assets and liabilities,” he said.
The Auditor General further explained that he was not able to establish whether expenditures reflected in these statements were incurred lawfully and in an effective way as required by Article 229(6) of the Constitution.
“This hence means that were the accounts with disclaimer of opinion be treated as accounts with no proper justification, then by implication 33pc of the total actual expenditure for 2011/2012 of Sh920bn can be regarded as having not been properly accounted for,”
He also indicated a shortfall in development revenue for the year under review.
“The revenue accounts demonstrate a shortfall of development revenue by 49 percent which translated to approximately Sh26 billion. This under collection was due to non-release of funds by development partners and low absorption of funds by projects and programmes,” he said.