Public Audit Act

This Act may be cited as the Public Audit Act.

Defines "an Accounting Officer of the Office of the Auditor-General" as referred to under section 16 (1)(b).

The Auditor-General must promote efficiency, accountability, effectiveness and transparency in the use of public resources.

The Auditor-General must be independent: they shall not be subject to direction or control when carrying out their constitutional or statutory functions, and the Auditor‑General and staff must perform impartially and exercise powers independently.

Procedures and time limits for filling a vacancy in the office of the Auditor-General: when a vacancy occurs the President must, within seven days and by specified notices, declare the vacancy and invite applications; a selection panel considers applicants and forwards at least three qualified candidates; the President must nominate and forward a candidate to the National Assembly which may approve or reject; the Speaker and President have three- and seven-day forwarding/appointment deadlines; the President may extend any period by up to twenty-one days; the Public Service Commission only provides secretariat services.

If the office of Auditor-General is vacant, suspended, appointment is pending, or the Auditor-General cannot perform duties, a person designated under subsection (1) acts as Auditor-General; that person must meet the minimum qualifications and may serve for no more than ninety days; when acting they have all the powers of the Auditor-General.

The Auditor-General must, before assuming office, make and subscribe to the oath or affirmation before the Chief Justice.

The Office of the Auditor-General must develop an organizational structure for consideration and approval by the Audit Advisory Board.

Establishes the office of Senior Deputy Auditor-General; the Advisory Board must competitively recruit the office-holder and the Auditor-General must appoint them; candidates must meet the qualifications set out in section 5.

The Senior Deputy Auditor-General must serve as head of administration and management of the Office, be its accounting officer, perform delegated duties and powers, and (in respect of subsection (1)(a)) report to the Auditor-General.

The Office of the Auditor-General may recruit other staff as necessary and determine their terms in consultation with the Salaries and Remuneration Commission, subject to Articles 230 and 234(5) of the Constitution.

State organs or public entities may second public officers to the Office of the Auditor-General on request; seconded officers are treated as officers of the Office and subject to its policies; the Auditor-General may second staff to State organs on request, and seconded staff must be under the host body's direction and must not audit that body for 24 months after secondment ends.

The Auditor-General may delegate powers and assign duties to subordinate officers (subject to written conditions) but remains responsible; may confirm, vary or revoke staff decisions made under delegation.

The accounting officer must annually prepare budget estimates of revenue and expenditure and work plans for the next financial year; the National Assembly must allocate adequate funds to the office of the Auditor-General.

Section 21 lets the Auditor-General require bodies or persons to produce official documents and provide information, and grants the Auditor-General powers to advise, request further information, summon people, reimburse travel costs, apply to court for non-official information, and invite other organs where fraud or corruption is suspected.

Section 22 authorizes the Auditor-General to, by court order, trace transactions into bank accounts where there is reason to believe public body funds were fraudulently or wrongfully paid; banks must produce documents when required; the Auditor-General must safeguard information and may make copies.

Allows the Auditor-General to outsource audit services to duly registered audit firms; sets duties and limits for appointed auditors, staff, and former officers, and preserves the Auditor-General's responsibilities.

The Auditor-General may engage or consult professional or technical experts, public or private, while performing duties under this Act to enhance the Auditor-General's performance.

Section 4 establishes the Office of the Auditor-General, states it comprises the Auditor-General and staff, requires reasonable access to services across the Republic, locates the headquarters in the capital city, and permits establishing branches anywhere in Kenya.

To qualify for appointment as Auditor‑General, the section states the person must be a citizen of Kenya.

The Common seal of the Office must be kept in the custody of the Auditor-General or of another person the Auditor-General directs; the Auditor-General may direct such other person.

Section 7 lists functions and powers of the Auditor-General, including giving assurance on internal controls and governance, undertaking audits of state organs and public entities, ensuring lawful and proper use of public money, issuing audit reports under Article 229, providing reports under Article 254, and performing functions prescribed by other written legislation. Subsection (2) states the Auditor-General may undertake audits required by the Constitution, this Act or other law.

The Office of the Auditor-General has the power to develop an organisational structure and staffing establishment for the Office, subject to Article 234(5) of the Constitution.

The Auditor-General has a range of general powers to investigate, obtain assistance, access records and premises, summon witnesses, request information from public officers, locate staff at audited entities, identify transaction origins, exercise specified powers under other laws, and to require searches, copies, seizure of electronic messages and assistance from other government agencies.

Section 25 establishes the Audit Advisory Board, sets its membership composition, lists member qualifications, allows the Auditor-General to co-opt two expert members, requires members to elect a chairperson who must not be the Auditor-General, requires the Auditor-General to appoint members within fourteen days by Gazette notice, and sets three‑year terms with one possible reappointment.

The Audit Advisory Board must meet at least four times and not more than twelve times in each financial year, with no more than four months between meetings; the Senior Deputy Auditor-General is Secretary; the Chairperson convenes and presides at meetings.

The Audit Advisory Board must advise the Auditor-General on exercising powers and performing functions under the Constitution and this Act, and must advise on specified matters including senior manager recruitment, organisational development, budget estimates and staff remuneration (in consultation with the Salaries and Remuneration Commission), and other matters referred by the Auditor-General.

Members of the Audit Advisory Board must be paid allowances and expenses provided by the Salaries and Remuneration Commission from monies appropriated to the Office of the Auditor-General.

The Office of the Auditor-General must apply applicable international auditing standards, principles and practices in its audits, subject to the Constitution and any written law.

The Auditor-General must determine how broadly and how deeply to examine or inspect public accounts, documents, information and audits under this Act.

Section 31 sets steps for certification audits: audited State organs/public entities must report within three months after Parliament/County Assembly considers the Auditor‑General's final report; the Auditor‑General must inform entities in writing before other audits begin, submit draft management letters and copies to heads/chairpersons at exit meetings, and finalise letters if no response is received; accounting officers must respond with remedial actions within 14 days; the Speaker must invite the Auditor‑General to present tabled reports.

Parliament must publicize audit reports within seven days of receiving them; the Auditor-General must publicize the report within fourteen days after submitting it to Parliament or the relevant county assembly.

The Auditor-General is entitled to unhindered access to all internal audit reports of State organs or public entities that are subject to audit by the Auditor-General.

The Auditor-General may conduct periodic audits; those audits shall be proactive, preventive and deterrent to fraud and corrupt practices and aimed at evaluating risk management, control and governance in State Organs and public entities.

The Auditor-General must audit financial statements for State Organs and public entities under Article 229 and must report annually to Parliament and the relevant county assembly.

The Auditor-General must conduct performance audits to examine how public money has been spent; the Auditor-General may carry out a comprehensive performance audit within six months after completion of any National or County project to assess value for money and submit the report to Parliament or a County Assembly for tabling and debate.

The Auditor-General may conduct forensic audits when requested by Parliament to establish fraud, corruption or other financial improprieties.

The Auditor-General may examine public procurement and asset disposal processes of state organs or public entities to check whether procurements were lawful and effective.

Parliament or the relevant county assembly must publicise audit reports on their official website and other public spaces within seven days of receiving them; the Auditor-General must publicise the report within fourteen days after the seven-day period expires following submission to Parliament or the relevant county assembly.

The Auditor-General and representatives must hold a high-level inception meeting (pursuant to section 31(1)(b)) to agree areas touching national security and decide an audit approach ensuring confidentiality; the authorised government vetting agency must vet all Auditor-General staff carrying out audits under this section.

The Cabinet Secretary responsible for finance may make regulations, so long as they are not inconsistent with the Act, to prescribe matters necessary or convenient for carrying out or giving effect to the Act.

The Auditor-General may request a legal opinion or advice from the Attorney-General on matters of law or fact.

If there is any inconsistency between this Act and other legislation about the functions and powers of the Auditor-General, this Act prevails.

The Auditor-General, staff, and persons acting on the Auditor-General's directions are not personally liable for acts or omissions done in good faith while carrying out the Auditor-General's duties or exercising powers under this Act or the Constitution.

The public is entitled to access official reports of the Auditor-General, subject to Article 35 and except where access would unduly jeopardize state security.

Section 41 lists the sources of funds available to the Office of the Auditor-General and rules for handling them, including that receipts are not paid into the Consolidated Fund, retention for Act purposes, bank account powers, and disclosure of donations.

The Auditor-General must not question the merits of a policy objective of the national government, county government, or any other public entity when conducting an examination under this Act.

The Accounting Officer must prepare and, after approval by the Auditor-General, submit the Office's financial statements for audit to the external auditor appointed by the National Assembly; the statements must include specified financial and performance statements and comply with Public Sector Accounting Standards.

The accounting officer must submit the office's accounts to the appointed auditor within three months after the end of the financial year; the appointed auditor must examine and audit those accounts within six months and must examine whether public money was applied lawfully and effectively.

The appointed auditor must prepare and submit an audit report to each relevant Clerk of Parliament and copies to the Cabinet Secretary responsible for finance and the Auditor-General; Parliament and the Auditor-General must publicise the report as stated, with Parliament subject to Article 35 and the Auditor-General to a fourteen-day timing rule.

The National Assembly must, within three months after receiving an audit report for the accounts of the Office of the Auditor-General, debate and consider the Annual Report of the Office (financial statements and activities) and take appropriate action.

Financial statements required under the Constitution, the Public Finance Management Act and any other legislation must be submitted to the Auditor-General within three months after the end of the fiscal year to which they relate.

The Auditor-General must, within six months after each financial year ends, audit and report on the accounts specified in Article 229 of the Constitution; the Auditor-General may also audit and report on accounts of any entity funded from public funds.

The Auditor-General must submit a special report to Parliament or the relevant county assembly when a matter arises in an audit that should be brought to their attention; Parliament or the county assembly must publicize the report within seven days and publish a gazette notice; the Auditor-General's office must publicize it within fourteen days after that seven-day period; and Parliament or the county assembly must discuss and review the report within sixty days after that seven-day period.

The Auditor-General must submit the final audit report to Parliament or the relevant county assembly, with copies to the Cabinet Secretary responsible for finance, the relevant County Executive Committee member for finance, and the accounting office of the audited entity; Parliament or the relevant county assembly must, within three months of receiving the report, debate and consider it and take appropriate action.

Parliament or the relevant county assembly must, within 30 days after the seven-day publication period ends, discuss and review other reports; the office of the Auditor-General must, within 14 days after that seven-day publication period ends, publicize the report on its official website and other public notice.

Section 52 addresses the use of media in publicizing reports and refers to the general nature of the report or document.

The accounting officer must either implement Parliament's recommendations on the Auditor-General's report or give written explanations; failure may result in being held in contempt and Parliament or the relevant County Assembly may recommend administrative sanctions such as removal or reduction in rank.

If there is a serious or persistent material breach of this Act, the Auditor-General may recommend withholding funds to a State organ or public entity when reporting to Parliament or the county assembly under the Public Finance Management Act (Cap. 412A).

The Auditor-General must determine a code of conduct and ethics for all public officers in the Office, in line with the Constitution, this Act and the Public Officer Ethics Act (Cap. 185B).

Every officer of the Office of the Auditor-General must observe the Code of Conduct and Ethics developed by the Auditor-General under section 55.

Staff of the Office of the Auditor‑General or outsourced auditors proven to have been compromised, bribed or corrupted for suppressing an auditee's fraud or corrupt practice must be liable to administrative action under this Act or by the relevant professional body.

Staff of the Office of the Auditor‑General must immediately disclose any fraud or corruption they learn of; officers must not knowingly cover up such acts; officers may not divulge an Auditee's business secrets except for official purposes under this Act or other law.

An officer of the Office of the Auditor-General who has an interest in a matter under consideration by the auditee client must disclose in writing the nature of that interest and must not participate in any auditing exercise relating to that client.

The Auditor-General must put in place a mechanism for confidential reporting about officers of the Office of the Auditor-General concerning unlawful acts, public funds violations, gross wastage, mismanagement and abuse of authority.

Officers of the Office of the Auditor-General must not engage in corrupt acts, conceal or fail to disclose audit information or conflicts of interest, or publish audit reports before formal submission; such offences are punishable by a fine not exceeding ten million shillings or imprisonment for up to five years, or both.

It is an offence for a person to, without reasonable cause or lawful excuse, obstruct, assault, threaten, fail to provide required information, submit false or misleading information, misrepresent or unduly influence staff or authorised persons of the Office of the Auditor‑General; on conviction the person may be fined up to five million shillings or imprisoned up to three years, or both.

If a person is convicted of an offence under this Act for which no other punishment is given, they are liable to a fine not exceeding two million shillings, or to imprisonment for up to one year, or both, subject to exceptions in the Act.

If the Auditor-General finds someone involved in fraud or corrupt practice, the Auditor-General must report them to the police, the Ethics and Anti-Corruption Commission or the Public Procurement Oversight Authority; if referred to the Public Procurement Oversight Authority, the Auditor-General may recommend debarment from future public procurement and asset disposal proceedings.

The Auditor-General may recommend to Parliament or county assemblies that a person responsible for a deficiency in audited money or assets be surcharged for the amount of the loss.

A person convicted of an offence under this Act may not hold public office or work for a State-owned entity for ten years after conviction.

Disallowable expenditure: any payment made without due authority.

Section 73 repeals the Public Audit Act, 2003 and contains transitional provisions allowing certain proceedings, investigations, disciplinary and appeal processes to continue under the new Act; it also provides transfers and such contracts continue and sets a thirty-day cessation for the Kenya National Audit Commission; references to "Controller and Auditor-General" are to be read as "Auditor-General".