NAIROBI, Kenya May 28 – NAIROBI, Kenya, May 28 — The Budget and Appropriations Committee has backed proposals to establish an independent funding framework for the Office of the Auditor-General, as lawmakers push for stronger enforcement of audit recommendations, expanded audit coverage, and tighter controls on public revenue collection.
The Committee, chaired by Samuel Atandi, engaged Deputy Auditor-General for Corporate Services Isaac Ng’ang’a and senior officials from the Office of the Auditor-General (OAG) during scrutiny of the 2026/27 Budget Estimates. Concerns over audit delays, revenue leakages in counties and a growing audit backlog dominated the session.
Atandi supported calls for financial independence for the audit office, noting that the current funding arrangement forces the Auditor-General to compete for resources with the very institutions it is mandated to audit.
“The fact that you have to fight for resources within Sector Working Groups alongside the very agencies you are supposed to audit is fundamentally flawed,” he said.
He added that the Committee would explore a structured financing model anchored on a fixed proportion of audited national revenue to enhance the independence and effectiveness of the audit function.
The Office of the Auditor-General warned that persistent underfunding continues to hamper its constitutional mandate, particularly in expanding audit coverage across counties, schools and emerging public entities.
Ng’ang’a told MPs that the audit universe has grown to more than 12,000 entities, while the Office is grappling with a backlog of over 8,150 unaudited financial statements.
Although the OAG had planned to audit 5,476 financial reports and conduct 88 specialised audits in the current financial year, resource constraints have forced a scale-down of operations, especially in the education sector.
The Office also disclosed that a request for an additional KSh420 million to support audits of public secondary schools and in-year reviews was not included in the approved budget, further straining audit timelines and contributing to arrears that could spill over into the 2026/27 cycle.
On revenue accountability, lawmakers raised concerns over weak linkages between financial audits and performance outcomes, particularly in counties where cash-based revenue collection systems continue to expose public funds to leakages and under-reporting.
In response, the OAG said it has undertaken systems-based audits on county revenue collection and is prioritising digitisation reforms.
“We are pushing for digitisation of revenue systems, including parking and water billing, to enhance accuracy and accountability,” the Office said.
Makali Mulu questioned whether the country has an accurate estimate of counties’ revenue potential and why under-collection persists despite repeated audit findings.
The OAG noted that the Commission on Revenue Allocation has previously published revenue potential estimates, but emphasised the need for stronger policy alignment to address inefficiencies in own-source revenue mobilisation.
The Office further proposed amendments to the Public Finance Management framework to introduce administrative and legal sanctions against accounting officers who fail to implement audit recommendations.
On education sector audits, the OAG called for a review of reporting timelines for public schools and TVET institutions, proposing alignment with the academic calendar to improve accuracy and ease reconciliation challenges.
“Aligning reporting timelines to December would significantly improve accountability and reduce pressure on audit cycles,” the Office said.
The Committee also underscored the need for broader structural reforms, including stricter enforcement of audit recommendations, accelerated consideration of performance audits and enhanced oversight of public expenditure to curb wastage and recurring audit queries across government institutions.
