Public Sector Entities Register Improvement In Financial Reporting

Public Sector Accounting Standards Board (PSASB) has said that most public sector entities continue to receive qualified and modified opinions (adverse and disclaimer) from the Auditor General’s office. In the FIRe Award 2021, out of the 289 entries that were received, 131 reports were qualified, 16 had adverse opinions and 13 had disclaimers of opinion.

Speaking today at a breakfast meeting in Nairobi, the CEO of PSASB, Mr. Fredrick Riaga said that what led to the qualification of these reports include unreconciled bank balances, unsupported expenditures, pending bills, budgetary control and poor absorption rates, unresolved prior-year matters and poor project implementation.

Despite Kenya boasting a vast number of qualified accountants, the demonstrated level of application of International Public Sector Accounting Standards (IPSAS) and International Financial Reporting Standards (IFRS) is still low and as such, there is a need for continuous training on these standards.

As a result, the Public Sector Accounting Standards Board (PSASB) has adopted a capacity-building model to ensure that public sector accountants can effectively apply the prescribed standards as and when they become applicable for implementation and also plug the gaps that are highlighted during the Financial Reporting (FiRe) Award evaluation.

“PSASB is keen to promote good corporate governance, in particular accountability, in the management of public funds and this has been a key element that the FiRe Award seeks to achieve through the evaluation process,” PSASB CEO Fredrick Riaga said.

The Auditor General Ms Nancy Gathungu, who presided over the occasion, said that majority of the country’s public universities have liabilities that exceed their assets, casting doubt over their ability to sustain operations.

“Almost all the universities have a problem and we have told them even as they prepare their books to factor in their ability to operate as a going concern,” said Auditor General Nancy Gathugu.

Ms Gathugu said that the same applies to several other State-owned enterprises, some of which should be scrapped to stop further bleeding of taxpayers resources though bailouts.