Kenya’s public finance management has come under sharp scrutiny after Auditor General Nancy Gathungu exposed major asset documentation failures totaling Ksh413.2 billion across 26 government ministries, departments, and agencies.
In her 2023/2024 financial year report, Gathungu revealed that widespread inaccuracies in fixed asset registers continue to hinder transparency and accountability in public institutions. The audit highlights glaring omissions, including missing school records, unvalued vehicles, and land parcels lacking descriptions, locations, or proof of ownership.
Accounting Transition in Jeopardy
These deficiencies pose a significant threat as Kenya prepares to transition from cash-based to accrual-based accounting standards. The National Treasury has already directed all government entities, including counties, to implement International Public Sector Accounting Standards (IPSAS) by July 1, 2024.
The transition requires each government entity to identify, value, and properly register all its assets using government-approved valuers.
“Accounting officers must inventory all assets, determine their value using a government valuer, and ensure they are fully reflected in the asset register. This ensures assets are properly recognized and accounted for in financial statements,” the Auditor General emphasized.
Key Departments Under Fire
The State Department for Basic Education showed the most serious failures, with public secondary schools lacking documentation for assets worth Ksh6.6 billion.
The Department for Economic Planning maintained an outdated Ksh1.4 billion register, with most entries still unvalued. In the health sector, the Medical Services Department listed Ksh9.5 billion in fixed assets, but failed to include any land assets, raising red flags.
Meanwhile, the Public Health and Professional Standards Department did not properly document 14 motor vehicles and ICT equipment, despite holding three land title deeds and occupying buildings that remain unlisted in the register.
Energy and Judiciary Also Faulted
At the Department of Energy, the Auditor General flagged a staggering Ksh322.1 billion in assets without proper tagging or serial numbers, making it impossible to verify or track them physically.
The Department of Lands and Physical Planning, with a register valued at Ksh6.7 billion, failed to include basic asset details such as names, locations, acquisition dates, and operational statuses.
The Judiciary also came under fire after excluding 26 disposed vehicles from its Ksh31.7 billion register, with no summaries to show when or how the disposals occurred.
Unmapped and Misrecorded Assets Raise Eyebrows
The Irrigation Department’s Ksh1.1 billion register omitted 13 vehicles, listed several assets with zero or unknown values, and failed to upload data into the National Treasury’s systems due to unmapped asset locations.
In one case, two Toyota Prado vehicles appeared as a single unit with dual registration numbers, highlighting systemic data entry and classification issues.
Huduma Centres Left Out of Registers
The Public Service Department failed to include assets from Huduma Kenya headquarters in its asset reports. Auditors found that 17 Huduma centres did not maintain any registers at all, while 14 others kept incomplete records, making it nearly impossible to verify national public service infrastructure.
To meet the demands of the new IPSAS standards, Auditor General Gathungu has ordered all accounting officers to immediately:
- Conduct comprehensive asset inventories
- Establish asset values using government-approved valuers
- Update and digitally maintain complete asset registers
She emphasized that accurate asset records are crucial to ensure credible financial reporting, strengthen public accountability, and support effective resource planning and service delivery.
