12 February 2019

Kenya: With Months Left, Edward Ouko Pushes for Audit of His Office

Auditor-General Edward Ouko is concerned that the National Assembly is yet to hire a qualified external auditor to report on the accounts of his office, with less than six months to the end of his eight-year tenure.

As he complained before the Public Accounts Committee (PAC) on Tuesday, House Clerk Michael Sialai told the team chaired by Ugunja MP Opiyo Wandayi that the process had been frustrating.

The Auditor-General audits and reports on the accounts of national government ministries, departments, commissions, independent offices, parastatals and county governments.

In turn, article 226 (4) of the Constitution provides that the accounts of this office be audited by a professionally qualified accountant appointed by the National Assembly.

The accounts of the office of the AG for the years 2014/15, 2015/16, 2016/17 and 2017/18 and beyond remain unaudited.

CONFLICT

Mr Sialai said there has been frustration as bidders have failed to submit relevant tender documents and because of conflict of interest.

"We have been unable to procure the services of an audit firm on account of non-responsiveness and conflict of interest. It has been a disservice to the OAG that its accounts have not been audited," Mr Sialai told the committee, which acts as an advisory authority in the recruitment process.

Mr Ouko appealed to the MPs not to read too much into the technicality of conflict of interest, saying it would only delay the process further and lock out firms that have been doing business with his office.

"The issue of conflict of interest must be looked at in the sense that if someone has worked for the OAG, that should not be an issue. It could be the reason why reputable firms are keeping off because they do a lot of business with us," he said.

Though MPs have no issue finding a reputable firm from any commonwealth country, they were uncomfortable with Mr Ouko's choice of the supreme audit firm of Liberia after he admitted that he audits the country's audit office.

Their fear was that "friendly audits" could be the result.

EFFECTS

The failure to get the auditor may have the negative implication of the OAG failing to get donors because they always ask for audited reports that he doesn't have.

In June 2016, the Parliamentary Service Commission (PSC) commenced the process of procuring the services of the external auditor for a three year period - 2014/15, 2015/16 and 2016/17.

Four firms submitted bid documents and the evaluation committee recommend that M/s Baker Tilly Merali- the lowest bidder, be awarded the tender.

The name of the company was subsequently tabled in the House but did not go through due to concerns of conflict of interest.

The PSC deliberated on the matter and recommended that the process of acquiring the external auditor be initiated by the clerk of the National Assembly and that he signs a letter of the award, but the MPs rejected it.

TERMINATIONS

Three other attempts were initiated but were again unsuccessful.

The first one was advertised in October 2017 in the local dailies and uploaded on the Parliamentary and National Treasury websites.

Four firms - Kiarie Kang'ethe and Company, BDO East Africa Limited, Olsen Partners, and Nelson & Francis Associates responded.

However, after evaluation, all the bids were found non-responsive so the tender was terminated on December 8, 2017.

Another one was initiated in January 2018 and three firms - Grant Thornton, Nelson & Francis Associates and Mazars - responded but all the bids were non responsive, leading to termination in March 2018.

The final and most recent tender process was done in September 2018, with nine firms expressing interest.

They were Kiarie Kang'ethe &Company, Grant Thornton, JG Bailey & Associates, RSM Eastern Africa, Baker Tilly Merali, PKF Kenya, Ronald & Associates, Nelson & Associates and Walubengo & Associates.

Again all the bids were non responsive and terminated in November 2018.

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