PIC queries discrepancy between State companies cleared by private auditors

Parliament wants State corporations under the Energy ministry probed for allegedly colluding with private audit firms to clear them of audit queries.

While State corporations books are audited by the Office of the Auditor General, all the parastatals under the ministry are audited by private firms, which have given them all a clean bill of health.

Public Investments Committee (PIC) chairman Abdulswamad Nassir raised the red flag yesterday and sought an explanation by the Director of Public Prosecutions Noordin Haji on how the corporations with huge budgets could have zero audit queries.

“I sought the DPP’s explanation since he has arraigned several top officials of some of the corporations over corruption-related charges but when the same organisations bring their books they have been declared clean by the private auditors,” said Nassir.

The corporations in question include Kenya Electricity Generating Company (KenGen), Geothermal Development Company (GDC), Kenya Electricity Transmission Company (Ketraco) and National Oil Corporation.

The firms are audited by renowned firms including Deloitte and the Price Water House Coopers (PWC).

Nassir said he had raised the issue with the Director of Criminal Investigations to probe the possibility of a conspiracy.

“We want the DCI to look into how these audit processes are conducted because it cannot be that barely after a parastatal is audited, investigators unearth criminal activities in their operations and take top management to court as was the case with Kenya Power. How is it that the audit did not detect such rot and raise the alarm in their reports?” posed the Mvita MP.

Nassir said his committee was concerned that all corporations whose books are audited by the Office of the Auditor General  attract a myriad of queries while those audited by the private firms have no queries raised.

The Auditor General is allowed by law to contract private firms to audit some entities on their behalf. Currently, the auditor general has contracted private firms to audit majority of parastatals under the energy sector.

“Is it a coincidence that all these State corporations audited by private firms get a clean bill of health every year yet those audited by the Auditor General have issues raised against them?” he posed.

 He said it was ironical, for example, that a private auditor had cleared the accounts of Kenya Power only for its top managers to be arrested and charged in court over massive rot in the company. 

“There is something these private firms are not telling us. You cannot tell us that after looking into the accounts of a company such as Kenya Power, they could not raise any queries against them,” he said.

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