APRM • SECOND COUNTRY REVIEW REPORT OF THE REPUBLIC OF KENYA Procedures and Legislative Initiatives to Ensure Effectiveness of Policy Making Bodies 318. The CSAR highlights some milestones in strengthening the effectiveness of various oversight bodies. It explains that the oversight roles of the Controller of Budget and Auditor General and their reporting responsibilities, and the National and County Assemblies over public finances at the national and county government are now explicitly provided for in the Constitution of Kenya 2010 and the PFM Act 2012. The oversight functions of these bodies cover ensuring adherence to principles of public finance and fiscal responsibility; approval of the establishment of public funds; reviewing the BPS (national) and County Fiscal Strategy (county) and approving budget estimates. The parliament (as a joint entity of both the National and County Assemblies) is also empowered by the Constitution of Kenya and the PFM Act 2012 to exercise various oversight responsibilities, including regarding the terms on which the national and county governments can borrow and issue guarantees for County Governments. In this regard, the PFM Act 2012 provides for creation of a Parliamentary Budget Office, which should provide professional services in respect of budget finance and economic information to the committees of parliament. 319. Through the Public Accounts Committee (PAC) and the Public Investments Committee (PIC), parliament ensures that the executive is accountable in the use of public finances. These oversight committees release reports regularly as to the use of public resources and performance of government institutions and investments. However, the major challenge that these committees continue to encounter include delayed submission of audited accounts and poor implementation of their recommendations. This undermines the effectiveness of the committees in preventing possible embezzlement. 320. The government has undertaken audit reforms that have culminated in the formation of the Kenya National Audit Office (KNAO), after the C & AG and the Auditor General Corporations were merged. This has resulted in a stronger and independent audit body. Among the key functions of the office is the promotion of economy, efficiency and effectiveness (value for money auditing), which has strengthened financial accountability and reduced fiduciary risk. For many years, there have been delays in reporting to parliamentary oversight bodies. The backlog is now being addressed through the strengthening of KNAO. 321. The internal control and auditing in Kenya is the responsibility of the Internal Auditor General’s (IAG) Office. This office is responsible for monitoring the compliance of ministries and their departments with the various financial regulations, instructions and accounting procedures. There are also internal auditors stationed in each ministry and who ensure that Accounting Officers carry out all the ministry’s financial activities in full compliance with the government’s financial regulations and extend rules. 322. The Internal Audit Department (IAD) in the National Treasury has undergone major strengthening and its mandate has been expanded. It has adopted a risk-based audit approach and spearheaded the development of the Institutional Risk Management Policy Framework (IRMPF) in the public sector. The adoption of IRMPF is envisioned to enhance risk identification and management by MDAs and provides a policy framework for risk- | 152 |