The role of audit committees on public financial management in Kenya Government Ministries
Marete, Lilian Gakii
MetadataShow full item record
This study sought to establish the role audit committees have played in the PFM in Kenya, focusing on the government ministries. With limited institutional support and an outdated focus on pre-audit activities, Kenya's internal audit function was neither efficient nor effective. However, formal legal recognition of the role of internal audit as part of an effective public financial management system changes in working methods and an evolving relationship with implementing agencies have enabled a revamped internal audit function to drive improvements in efficiency and controls in many key ministries. Internal audit reforms are now a core component of the government's wider PFM Reforms Strategy. As part of these reforms, and in a bid to enhance corporate governance in the public sector, the government of Kenya introduced Audit committees in the year 2000. The audit committees were meant to improve the level of fiscal probity in the government ministries in Kenya. However, the Audit committees remained inactive till 2005 when most of them started operating as required. Since then, little research has been done to establish whether or not the Audit Committees have managed to improve transparency in public financial management. A study was carried out to establish the role of Audit Committees on the public financial management among government ministries in Kenya. The study sought to achieve two objectives: Establish the extent to which Audit committees in government ministries are functional and the role they play on public financial management among government ministries in Kenya. The study was a descriptive design. The population of the study comprised all the members of audit committees in the 44 ministries. Stratified and simple random sampling was used in coming up with the desired sample size for the study. The 44 government ministries were treated as separate strata from where one member of the Audit Committee was randomly selected to participate in the study. Both primary and secondary data was collected for the study. A questionnaire was used to collect primary data from the 44 respondents who were picked through simple random sampling from the target population of 220. Data was analyzed by use of frequencies, percentages and regression analysis. The study found that audit committees enhance transparency in ministries, they ensure observation of government policy, they lead to reduction in corruption, they ensure proper use of resources and they enable ministries achieve performance targets. Thus the study concluded that audit committees play a crucial role in public financial management.