The Public Audit (Amendment) Bill, 2024

Background

The Public Audit (Amendment) Bill, 2024, seeks to amend the Public Audit Act, 2015, to align its provisions with the Constitution of Kenya. This alignment follows judicial declarations (such as Transparency International (TI) v. Attorney-General & Auditor-General) that found several administrative provisions of the 2015 Act unconstitutional. The amendments aim to resolve administrative gaps, preserve the independence of the Auditor-General, and improve the efficiency and transparency of the public auditing process.

Key Amendments

• Redefined Definitions (Section 2): Introduces precise legal definitions for "disallowable expenditure" (wasteful, irregular, and nugatory expenditure), "economy", "efficiency", "irregular expenditure", and "public money".
• Office Composition (Section 4): Clarifies that the Office of the Auditor-General comprises the Auditor-General (as the accounting officer) and staff.
• Audit Advisory Board (Section 25): Establishes an unincorporated advisory body tasked with advising the Auditor-General on budget plans, human resource management, and other referred matters.
• New Audit Frameworks (Sections 38A, 38B, 38C): Empowers the Auditor-General to conduct:
  • Citizen Accountability Audits: Periodic or investigative audits based on citizen public contribution or participation.
  • Compliance Audits: Verifying whether public entities comply with laws, regulations, and policies in resource management.
  • Forensic Audits (Section 37): Investigating fraud, corruption, financial improprieties, or misuse of public resources.
• Reporting Timelines (Section 39): Mandates that state organs or public entities must submit preliminary reports to Parliament or County Assemblies within one month of an audit debate, detailing how they have addressed the Auditor-General's recommendations, with a final follow-up report required within six months.

New Obligations

• Public Access to Reports (Sections 45 & 72): The Auditor-General is required to publish and publicize reports on the official office website or other public spaces within seven days of submitting them to Parliament. This public right of access is explicitly subject to Section 6 of the Access to Information Act, 2016, to prevent the exposure of matters jeopardizing state security.
• Accounting Officer Responses (Section 31): Accounting officers must submit written responses, including remedial actions undertaken, within 14 days of receiving a draft audit report.
• Conflict of Interest Disclosure (Section 59): Any officer of the Office of the Auditor-General with an interest in an audited entity must disclose this interest in writing and recuse themselves from the audit.

Penalties

• Staff Malpractice (Section 61): Any officer of the Office of the Auditor-General who engages in corrupt acts, willfully conceals audit findings, fails to disclose conflicts of interest, or prematurely leaks audit details commits an offence. Upon conviction, the officer is liable to:
  • A fine not exceeding KSh 10 million;
  • Imprisonment for a term not exceeding five years; or
  • Both the fine and imprisonment.
• Failure of Accounting Officers to Act (Section 31(3)): If an accounting officer fails to satisfactorily address issues raised by the Auditor-General, they are liable to disciplinary action under the terms and conditions of their employment.