7 ministers on the spot over inactive
State firms

A House committee has put seven Cabinet Secretaries on the spot over their failure to operationalise State corporations that fall within their respective ministries.

The Public Investments Committee on Social Services, Administration and Agriculture chaired by Navakholo MP Emmanuel Wangwe told the CSs to move with speed and operationalise the affected institutions as set out in law.

MPs regretted that some of the non-operationalised corporations do not prepare and submit statements for unspent money that was returned to the Exchequer contrary to section 45 of the Public Finance Management Act, 2012.

The affected CSs hold the Health, Agriculture and Livestock Development, Lands and Public Works, Housing and Urban Development, Tourism, ICT, Trade and Interior dockets.

In a report, the House team revealed that a total of 16 out of 23 state corporations reviewed failed to account for Sh3.9 billion due to their failure to prepare and submit financial statements for audit. Reads the report: “The committee noted that the state corporations have their financial books of accounts incorporated into their respective parent ministries or departments despite having been established as state corporations.”

Autonomy

The report noted that the 23 state corporations in question have their financial books incorporated into their respective parent ministries or departments despite being established as state corporations which contravenes the provisions of Articles 226 and 229 of the constitution, section 68 (2) (k) of the Public Finance Management Act, Public Audit Act.

It also raised concern that the state corporations were being managed by their sister corporations rather than exercising their autonomy derived from their establishing Acts adding that the majority of the said institutions are managed by staff seconded from the parent ministries or state departments denying them semi-autonomous status.

Further, it expressed concern that there is deliberate micro-management of the state corporations by their respective parent ministries or state departments thus depriving them of adequate funding to offer intended services to the public.

On governance, the report shows that some of the state corporations were operating without a substantive board of directors and accounting officers.