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Ideas & Debate

Public accountants cannot be glorified clerks


In recent years, a number of media outlets have reported on abusive procurement practices and misappropriation of public funds by public officials charged with such functions. The reports tend to generate a lot of public outrage and the debate has often centered on who should be held accountable.

For its part, the government will maintain that the institutions put in place to deal with such embezzlement are doing the best they can. There are numerous examples of the suspension or dismissal of officials involved (including senior officials), the freezing of assets and heavy fines, among others.

However, this is unlikely to appease a public yearning for high-profile convictions, with the main criticism being that only the ‘little fish’ are caught in the net for public procurement offences, with many of the top officials appearing to get away unscathed, or worse, with a slap on the wrist.

So where should accountability end when public funds are misappropriated through irregular procurement? Faced with this question, the High Court delivered an enlightening decision on February 28, 2022, in the case ‘Tom v Director of Public Prosecutions & 2 other; Kenya National Highways Authority & other (interested parties).

In this case, the Kenya National Highways Authority (KenHa) approached the National Land Commission (NLC) to compulsorily acquire land for the construction of road networks in Mombasa. The NLC, with the help of its surveyors and planners, proceeded to identify and acquire the land.

However, in an interesting turn of events, the petitioner – who was the CEO of NLC, was later arrested and charged by the Ethics and Anti-Corruption Commission (EACC) for various offenses resulting from the payments made by the NLC in relation to the earth.

In its defence, the Claimant argued that its role in the whole procurement exercise was purely administrative – to implement the decision of the NLC Land Acquisition and Compensation Committee, which had Approved and authorized all payments made to Project Affected Persons.

The petitioner argued that all technical decisions of the NLC should be made through committees, thus reducing him to “a glorified clerk”, as he had no voting rights and could not influence any of the decisions of a committee.

The court strongly disagreed with the claimant’s assertion, finding that as CEO and accountant of the NLC, he could not hide behind the decisions of a committee as that would be tantamount to handing over his statutory duties to a third party.

Additionally, due to the provisions of the Public Financial Management Act (PFMA), which places the burden of managing the finances of a public entity squarely on the accountant, obliging all accountants to ensure that resources of their registry are used in a lawful, authorised, effective, efficient, economical and transparent manner.

Given the level of responsibility expected of the role, it is important to understand who qualifies as an accounting officer. Accountants of national government entities such as ministries, departments and agencies are appointed by the Cabinet Secretary to the National Treasury, except where expressly appointed under relevant legislation.

In the case of state corporations, their CEOs are deemed to be the accountants (unless specifically designated by law) while the principal secretaries are the designated accountants for their respective departments of state.

At the county level, accounting officers of county government entities are individuals designated as such by the member of the county executive committee in charge of finance. Ordinarily, chief officers, by virtue of their office as administrative chiefs, become the accounting officers of their respective county departments.

Accounting officers of national government entities are responsible to the National Assembly for the management of the resources of their respective national government entities, while those of county public entities are responsible to the county assembly. What then should the accountant’s expectations be in the context of public procurement and the sale of assets?

One of the main lessons of the High Court’s decision in the case cited above is that accountants must take a proactive approach to ensure the due process of all public procurement and the disposal of assets carried out in the part of their records.

They cannot be passive observers. While they may set up tender committees, evaluation committees and any other committees necessary to help them perform this function, they should always remember that the responsibility lies with them.

This should hopefully motivate accountants to go the extra mile to ensure that all transactions on their file are professional and honest.

The law provides some respite to accountants for acts (or omissions) committed in good faith in the performance of their duties. However, for those found guilty of committing an offence, the law provides for a penalty of fine, conviction, or both.

This is not to say that other cadres of public officials who engage in abusive procurement practices cannot be held accountable. The law requires that all public officials adhere to national values ​​and principles of good governance, integrity, transparency, and accountability in the performance of their duties. It therefore follows that each person along the supply chain can be led to book.

In its decision above, the High Court embodied the famous Chinese proverb that a fish rots from head to bottom. Senior management of public entities cannot escape blame when it comes to poor procurement practices.

Viewed positively, this decision should encourage accountants to take the steps they deem necessary to streamline purchasing in their roles, as they have the full support of the courts.

They should not act or be perceived as glorified clerks, but rather assume their rightful position as primary actors in the acquisition and preservation of public assets for future generations.