Frequently Asked Questions

If you have a question about how the audit process works, or how the OAG works then take a look at the frequently asked questions that we have prepared to try answer your inquiries.

The Office of the Auditor-General (OAG) is an Independent Office established under Article 229 of the Constitution of Kenya. The Office is charged with the primary oversight / assurance role of ensuring accountability within the three arms of government (the Legislature, the Judiciary and the Executive) as well as the Constitutional Commissions and Independent Office.
 
The Auditor-General is mandated to audit and report in respect to each financial year on the accounts of: the national and county governments; all funds and authorities of the national and county governments; all courts; every Commission and Independent Office established by the Constitution; the National Assembly, the Senate and the county assemblies;  political parties funded from public funds;  the public debt and the accounts of any entity that legislation requires, and any entity that is funded from public funds.
 
In addition, Article 229(6) of the Constitution requires the Auditor-General to confirm whether or not public money has been applied lawfully and in an effective way.
 
a) Certification of accounts to assure fiscal responsibility
Certification audit responds to the core mandate of certifying accounts at national and county levels and expressing an opinion as to whether or not they are prepared   in accordance with the applicable financial reporting framework and/or statutory requirements.
The end product of this exercise is an annual audit report on each entity that is presented to Parliament and the relevant County Assembly.
 
b) Continuous audit presence to assure on managerial accountability
Continuous audit ensures that the office is proactive, preventive and deterrent to fraud & corruption, wastage and abuse of public resources. This requires the auditor to constantly be on the ground to continuously assess the risks brought about by the evolving environment so as to: perform “real time” transactions testing and data analysis that enables timely recommendations; respond instantly to issues of national, county governments  and any public concerns that require immediate audit or investigation; optimize use of audit resources while increasing audit activity and improve financial systems and business processes for effective risk management, control and governance.

c) Performance audit to assure on service delivery to Kenyans
This is audit work responding directly to the bill of rights and social rights of Kenyans that will be met through development and implementation of programmes such as health, clean and safe water, education, housing and social security.
We respond to the economy, efficiency and effectiveness with which the resources are utilized to deliver services to the public. This Office assesses whether the programmes implemented lead to results, outputs and outcomes that positively transform the lives of citizens.
The products of this audit are performance audit reports which are issued at the end of the audit exercise.
 
Our reports are submitted to Parliament and the relevant County Assemblies who represent the people of Kenya.

The reports are discussed at the relevant committees i.e. Public Accounts Committees (PAC) for National and County Government accounts and Public Investment Committees (PIC) for accounts of State and County Corporations.

After discussions are complete the Parliamentary and County Assembly committees with the assistance of the Office of the Auditor-General give recommendations which must be implemented by the entity concerned. Thereafter, the Auditor-General follows up to confirm whether the recommendations have been implemented.
 

The relationship is one of partnership in the oversight role. This is how it works. The Executive (Accounting Officers) submits a budget to Parliament or County Assembly for allocation of resources. Once Parliament or County Assembly  provides the resources (appropriates)  and the President  or Governor assents, the executive implements the programmes as budgeted for; which should be  geared towards service delivery.

The executive has to account for the funds provided at the end of each financial year through financial statements to the Auditor-General for Audit. Parliament and County Assemblies requires the Auditor-General to confirm whether the funds have been applied lawfully and in an effective way. The Auditor-General submits his audit reports to Parliament and relevant County Assemblies for discussions, recommendations and action.

The Auditor-General is also audited by an independent auditor appointed by the National Assembly.
 
The final product of our audit of the financial statement is an audit opinion, in which the Auditor-General expresses his/her satisfaction or non-satisfaction of the financial statements. The Auditor-General’s opinions are unqualified, qualified, adverse or disclaimer. The specific explanations on the opinion are as follows:
 
An unqualified opinion is a clean opinion, meaning that the financial transactions by and large were recorded properly and are in agreement with underlying accounting records.
 
qualified opinion means that although by and large the financial transactions are recorded and are deemed to be in agreement with the underlying records, there may be cases where the Auditor-General is unsatisfied with the veracity of certain expenditures, which in his view may not be significant. Hence, except for such unsupported expenditure, the accounts reflect by and large a true and fair situation.
 
An adverse opinion means that although the financial transactions are recorded and there are books of accounts, the Auditor-General may be unsatisfied with the veracity of significant amounts of expenditure. Consequently, the Auditor-General cannot give a clean or unqualified opinion; and gives an adverse opinion.
 
A disclaimer of opinion is serious and means that there was no basis upon which the Auditor-General can satisfactorily undertake an audit because the accounting records are unreliable; there are no verifiable supporting documentation and explanations for transactions. Consequently, the Auditor-General can neither give a qualified nor an adverse opinion; and gives a disclaimer.
 
Apart from the financial statements, the Auditor-General through his/ her continuous audit assignments and performance based audit; issues other audit reports throughout the year as well as reports on specially requested audit by PAC, PIC and the President. These reports are destined to Parliament and the President.