What awaits new Auditor General as she takes over

State-controlled firms listed on the Nairobi bourse and foreign funded loan projects top the list of the long delayed audited financial statements that the new Auditor-General Nancy Gathungu will start reviewing from next week.

Ms Gathungu said Thursday that the clearance of the backlog will start from simple to complex reports, with priority being given to firms such as Kenya Power #ticker:KPLC, KenGen #ticker:KENGEN and East African Portland Cement Company #ticker:PORT from next week Friday.

“We will give priority to financial reports of listed entities followed by those funded by development partners and organisations with syndicated loans,” said Ms Gathungu who formally took over the office yesterday.

“We will then move to clear the reports of Ministries, Departments and Agencies of Government.”

The news offers reprieve to the state-owned firms listed at Nairobi Securities Exchange given that they had breached the September 30 deadline of publishing audited results.

Kenya Power, KenGen and EAPCC were granted a special window to release unaudited financials for the year to June 2019 but with a disclaimer that the Auditor General will have to review the books.

Current and potential investors usually rely on audited results to make investment decisions such as buying or selling stakes in listed companies.

Shareholders of KengGen are also waiting for this audit to know whether or not they will get a dividend. The firm had in February announced delay of decision on dividend payment pending the audit.

State-owned firms and agencies must secure approval for reporting their financial results from the Auditor-General, but Ms Gathungu’s predecessor, Edward, Ouko retired in August 2019. The gap had led to pile up of audit work, which has also affected books of other key entities such as the Central Bank of Kenya, Capital Markets Authority and Ethics and Anti-Corruption Commission.

Ms Gathungu yesterday received handing-over notes and other instruments of office from Mr Ouko, ending the vacuum that lasted more than 10 months.

Mr Ouko warned that a 10- month gap is a long period and may have provided a window for graft in government offices by people riding on the proverbial absence of a cat. Ms Gathungu targets to clear the 2018/19 financial reports of the national government by between August and September.