CORPORATIONS: The State Corporations Appeals Tribunal (SCAT) operated without a functional board for a whole year, an audit report by Auditor General says.

In her findings, Nancy Gathungu says the tribunal breached subtle provisions of Section 22 of the State Corporations Act, CAP 446 with key appointees missing from its board, meaning transactions carried out during that period escaped crucial checks and balances.

“Tribunal operated without a functional board, as the Secretary was the only person in office during the year. 

This is contrary to the provisions of Section 22 of the State Corporations Act, CAP 446,” notes the Auditor General in her report on SCAT for the financial year ended June 30, 2020.

Consequently, the office of Auditor General further found that owing to those omissions the tribunal’s effectiveness over controls, risk management and overall governance in absence of a functional board in particular, further exposed the institution.

Legally, the Tribunal by law consists of a chairman, who is appointed by the President, and two other members appointed by the Treasury Cabinet Secretary while the Attorney General shall appoint a public officer to be Secretary to the Tribunal. During the financial year 2019/20 there was only one board member.

The positions of the other board member, Samuel Onyango fell vacant in March 2014, as well as that of the chairman in February 2018 when the terms expired.

Internal control

“The standards require that I plan and perform the audit to obtain assurance about whether effective processes and systems of internal control, risk management and overall governance were operating effectively, in all material respects.

I believe that the audit evidence l have obtained is sufficient and appropriate to provide a basis for my conclusion,” the Auditor noted.

The report also noted that the tribunal board was not able to discharge its statutory mandate as it was not fully constituted after the term of the chairman and the one board member expired without replacement.

In the financial year, the tribunal was allocated Sh21.53 million for recurrent expenditure while staff advances amounting to Sh4.48 million are documented to have been written off during the period under review without the approval of the Cabinet.