The Kenyan Parliament has ordered the public energy companies under the Ministry of Energy to stop hiring private auditing firms. Kenya Power, Kenya Transmission Company (KETRACO), and Kenya Generation company have been ordered by the House Public Investment Committee (PIC) to put an end to hiring external auditors as it goes against the provisions of the Public Audit Act (PAA) and the Public Finance Management (PFM) Act.
According to the Committee, the Constitution and the PFM Act, 2012 require the Auditor-General to ”Audit and report on the accounts of any entity that is funded from public funds”. The law, however, allows the Auditor-General to outsource audit services after entering into contracts with private audit firms. The committee, however, alleges the companies sought the services of the auditors without following due process.
Chairman of the Public Investment Committee (PIC), Abdulswamad Nassir, has directed Auditor-General Nancy Gathungu to stop cancel all consultations and approval of private auditing firms. The PIC in 2018 had directed parastatals under the Ministry of Energy to drop all private auditors amid concerns they failed to capture manipulated financial statements manipulated of the companies despite outstanding queries and procurement irregularities.
The new order by the Committee will affect international auditing firms, including Deloitte, Ernst & Young etc.