REPUBLIC OF KENYA
COUNTY ASSEMBLY OF LAIKIPIA
THIRD SESSION
FIRST ASSEMBLY
REPORT OF THE COUNTY PUBLIC ACCOUNTS AND
INVESTMENTS COMMITTEE ON FORMATION OF
INTERNAL AUDITING COMMITTEE
Dated:24th February, 2015
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1.0 PREFACE
The County Public Accounts and Investment Committee was established on 24th April 2014 and
consist of the following members:

Hon Peter Thomi
-Chairman

Hon Michael Kinyua
-Vice Chairman

Hon Catherine Waruguru
-Member

Hon Jacob Endom
-Member

Hon Rose Maitai
-Member
The mandate of the County Public Accounts and Investment Committee has been stipulated in
the S.O 185 (2) and shall be as follows:
1. There shall be a select committee to be designated the County Public Investment and
Accounts Committee.
2. The Public Investments and Accounts Committee shall be responsible for:
(i)
The examination of the accounts showing the appropriation of the sum voted by
the County Assembly to meet the Public expenditure and of such other accounts
laid before the county Assembly as the Committee may deem fit.
(ii)
The examination of the audited reports, accounts and workings of the County
Public Investments. Whether the affairs of the County Public investments are
being managed.
(iii)
To examine the report, if any of the Auditor General on the public investments.
(iv)
The examination, in the context of the autonomy and efficiency of the County
Public Investments are being managed in accordance with sound financial or
business principles and prudent commercial practices.
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INTRODUCTION
Mr. Speaker Sir, on the 31st July 2014, Hon. Daisy Maitho rose on the floor of the house to
request a statement on the establishment of the County Internal Auditing Committee. The
statement was committed to County Public Accounts and Investments Committee (CPAIC) for
consideration. The committee was to inform the house whether the Internal Auditing Committee
had been established by the County Government or not.
In response, and on behalf of the Committee, I therefore wish to state the following;The Internal Auditing Committee is a requirement of the Law under the PFM Act 2012, Section
73 Sub-section 5 and Section 155 Sub-section 5 whose composition and functions are contained
in treasury draft regulations on Internal Auditing Committee 2012, part 2.
Mr. Speaker Sir, again subject to the draft regulation 4 of Internal Auditing Committee 2012,
every persons or officers authorized and responsible for overseeing governance in each state
organ or public organization shall establish an Internal Auditing Committee in accordance with
these regulations and the establishment gazatted in the official Government Gazette not later than
July 1, 2013 or 3 months after the establishment of the organization. Mr. Speaker it is worth to
note that the regulations that would guide the establishment of the Internal Auditing Committee
are yet to be approved and gazetted by the National Assembly.
The regulations contained the following provisions; Powers, Vacancies, Roles &
Responsibilities, Values & Ethics, Meetings, Code of Conduct, Remuneration, Reporting, and
Performance appraisals of members of the Internal Auditing Committee. Following the house
committee’s discussions with the head of the County Internal Audit on 28th and 29th November
2013, he provided a summary of information required for the establishment of the Internal
Auditing Committees based on the draft regulation that is yet to be gazetted since there are no
other regulations to guide the process.
In a letter dated 04th June, 2013, sent to the County Executive Member of Finance and planning
from the County head of Internal Audit he requested that the Internal Auditing committee be
constituted as a matter of urgency to enable the County mirror the practice by National
Government.
On 19th June, 2013, another letter was send to the County Executive member of Finance and
Planning by the County Head of Internal Audit. In the letter he expressly outlined the process of
setting up the required structure of establishing the Internal Auditing Committee.
Mr. Speaker sir, in a letter dated 07th August, 2014 sent to the County Executive member of
Finance and Planning, the County Public Accounts and Investments Committee requested for
information relating to establishment of the said Committee.
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FINDINGS
Mr. Speaker Sir, in a letter dated 11th August 2014; the committee received a letter from the
County Executive Member of Finance affirming that already there was an Internal Auditing
Committee in place. The County Public Accounts and Investments Committee further enquired
on when the committee was established as well as the membership composition of the
committee. The CEC of Finance informed the CPAIC that the Internal Auditing Committee had
been formed on 11th August 2014 and the following five members had been appointed by the
Governor;
1.
2.
3.
4.
5.
Mr. Daniel Mugambi Mwangi-Member
Mr. Joseph Mureithi King’ori-Member
Mr. Joseph Kuyo Legei-Member
Ms. Phoebe Wangechi Karimi-Member
Ms. Joan Jeruiyot-Member
Mr. Speaker. CPAIC members received letters of the five individuals who had been appointed to
this committee. However, the County Public Accounts and Investment committee could not
pointout the criteria that was used to identify the 5 members of the Internal Auditing committee,
their suitability, their qualifications or their roles before they were appointed since there were no
documents tabled before County Public Accounts and Investment committee to proof otherwise.
Therefore in a report of 18th August 2014 and tabled in the Assembly on 20th August, 2014 by
the CPAIC noted a lot of inconsistencies with the documents given by County Executive
Member of Finance.
Mr. Speaker Sir, the County Public Accounts and Investment Committee had requested for a
period of two weeks to enable it conduct investigations, and more so invite the County Executive
Member, Finance as well as the Interim County Secretary to clarify this matter.
The County Public Accounts and investments committee on several occasions invited the two
officials to appear before the County Public Accounts and Investment committee. On
Wednesday 15th October 2014, they finally honored the CPAIC invitation to appear before the
committee. The interim County Secretary, the County head of Internal Audit as well as the Chief
Officer- Finance who was representing the County Executive Member of Finance were present
for the meeting held in Old House on the same day.
During the meeting, the Interim County Secretary informed the members that he had not
assumed office by the time the Internal Audit Committee was formed and therefore he was
unable to answer queries arising from the appointments. He also did not have any supporting
documents on the criteria used to appoint the members of the Internal Auditing Committee.
Mr. Speaker Sir, on whether the Internal Auditing Committee is in place, the County head of
Internal Audit informed the committee members that in her capacity as County head of Internal
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Audit she has never met the appointed members. She was also not aware how the candidates
were sourced, and who the real appointed members are. She further said that the County
Executive Member of Finance was the only one who had the capacity to tell the County Public
Accounts and Investigation committee the criteria used to select the 5 appointees. She pointed
out that after reading the draft regulations, it was clear that the County head of internal Audit was
to become the committee secretary by virtue of being the head of Internal Audit. However, to
date she had no any further information on the Internal Auditing Committee, as well as the
contact person of the committee.
The County Public Accounts and Investigation committee was informed that the main reason
why the Internal Auditing Committee had not been established as provided for under the PFM
Act was because of the delay in gazettement of the regulations.
On the same note the Chief Officer for Finance was hard pressed to explain to the County Public
Accounts and Investigation committee how then had they undertaken the process of appointing
the 5 members yet the regulation was not in place. The County Public Accounts and Investment
committee noted that despite the Chief Officer having been send by the CEC Finance to
represent him, he had little information on the formation and appointment of the Internal
Auditing Committee and therefore the County Public Accounts and Investment committee
concluded that the officers present were inadequately prepared. It is in this regard Mr. Speaker
that the County Public Accounts and Investment committee agreed that for this matter to be
concluded; the CEC Finance was to appear before the County Public Accounts and Investment
committee in person to shed light on this whole saga.
Mr. Speaker Sir, on 07th November 2014 the County Public Accounts and Investments
Committee members held a meeting with the County Executive Member of Finance in Meru and
was accompanied by County head of Internal Audit. The County Executive member of Finance
informed the County Public Accounts and Investments Committee members that:





His office had scouted for names even before they were appointed to the Internal
Auditing Committee though he could not table any evidence to support this claim.
All the members were qualified though he did not have their CVs with him.
As CECM, for Finance and Planning, he was the County Government Finance and
economic advisor although the County Public Accounts and Investment committee did
not see the relationship of being the advisor and appointments of Internal Auditing
Committee.
His office did not have regulations to follow in making the appointments, instead they
only had a draft which they used to appoint the five members to the committee. The PFM
Act 2012 is also subject to regulations which are in draft. The County Public Accounts
and Investment Committee noted that this was in contradiction of the provisions of the
draft regulations on establishment of the committee.
The Internal Auditing Committee members having been appointed have not yet met.
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

He consulted with other County officers, although he had no written document to prove
this.
The individuals who were appointed were aware of their appointment however, the
committee has not been inaugurated since they have never met and the date for
inauguration has not been set out.
Mr. Speaker during the discussions it was noted that CPAIC was not the only party concerned
about nonexistence of the Internal Auditing Committee but also the County head of Internal
Audit was also equally concerned. The CPAIC categorically informed the CECM, for Finance
that:




The County head of Internal Audit was not aware on the progress of establishment of the
Internal Auditing Committee.
According to the County head of Internal Audit, the CECM had not consulted the office
of County Internal Audit and especially her office.
The County Government has a legal department that could have assisted in interpreting
these legal documents like PFM Act and the draft regulation. He could also have
consulted the court for legal redress.
The constitution has principles that offer guideline on how to conduct business in the
public service under chapter 13. Article 10 stipulates on national values and principles
governance, there are also other provisions that should guide such appointments.
Mr. Speaker Sir, the following guidelines in the draft regulation guide the formation of the
Internal Auditing Committee:
1. Establishment.
The Internal Auditing Committee shall be established as per PFM Act 2012, section 73 & section
155 sub sections 5.
This should have been done not later than July 1, 2013 or if the organization came after
regulations then not later than 3 months after the establishment of the organization.
2. Composition of Internal Auditing Committee
The minimum number is 3 and the maximum is 7. Majority of members of the appointed must
not be;



Past or present employees of the organization,
Have served as employee or agent of a business organization that has done businesswith
the organization within the last 2 years.
A holder of a political office
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
At all times the Internal Auditing Committee should have sufficient members for
meaningful discussions and deliberations.
3. Qualification of Members.
 Possess or obtain a basic understanding of government Financial Reporting or Auditing,
 Possess or obtain basic understanding of objects, principles and functions of the
organization to which he is appointed.
 Persons of integrity and are in compliance with chapter 6 Article 73 (2) of the
constitution.
4. Appointment
 Appointing Authority shall appoint one of the committee members as the Chair.
 Consideration should be on personal qualities and abilities to lead, encourage
participation of other members, conduct meetings in a manner that demonstrate a desire
to establish effective communications with all stakeholders
 Appointing Authority shall appoint of a person/s from within organization to provide
secretariat services preferably from head of legal or internal Audit.
 Secretary is an ex- officio member and had no voting power.
5. Requirements of Members
 The chairman of the committee may not be at the same time a member of any other
committee of the organization.
6. Funding of the Internal Auditing Committee.
The executive head of the organization shall ensure that the committee is adequately funded and
authorized to engage the services of financial, experts, legal counsel and other appropriate
specialist as necessary to fulfill their responsibilities.
7. Responsibilities
The committee shall not have responsibility, over the management of risk, control and
governance process but shall offer opinion or recommendation on the way in which such
management is conducted. It shall support the Accounting officer with regards to responsibilities
for issues of risk, control and governance and associate assurance.
8. Service
 Member can serve up to a max of 3 Internal Auditing Committees at the same time
 Member shall be appointed for a term of 3 years and shall be eligible for re- appointment
for a further one term only (Can only serve for 2 terms)
 At least one third (1/3) of members shall retire every term and are not eligible for reappointment.
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9. Declaration of conflicts
 Each member upon appointment to the committee for the first time should submit written
declaration to the appointing authority declaring whether he has a conflict of interest or
upon becoming aware of his appointment that he has a conflict of interest.
The CPAIC members agreed that:
-
The Internal Auditing Committee was illegally formed since they did not follow the right
regulations of constitution
The appointees should be subjected to public scrutiny.
RECOMMENDATIONS
Mr. Speaker Sir, the County Public Accounts and Investment committee recommends that:
1. The Internal Auditing Committee be reconstituted afresh following the draft regulations as
provided for in PFM Act 2012, section 73 and section 155 sub-section 5.
2. The committee recommends that the above recommendation be implemented within 60 days
as provided for in the standing orders.
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ACKNOWLEDGEMENT
The County Public Accounts and Investment Committee extends its gratitude to the Speaker of
Laikipia County Assembly, the office of the Clerk and the staff of the County Assembly for their
continuous support, assistance, and commitment.
The Committee also wishes to thank and appreciate the firm support of the Committee Members
for the successful conclusion and compilation of this report.
Signed…………………………………
Date………………………….…..
Hon. Peter Thomi,
(Chair person Public Investment and Accounts Committee)
Signed…………………………………
Date………………………….….
Hon. Michael Kinyua,
(Vice chairman Public Investment and Accounts Committee)
Signed…………………………………
Date………………………….…..
Hon. Catherine Waruguru,
(Member Public Invetment and Accounts Committee)
Signed…………………………………
Date………………………….…..
Hon Rose Maitai,
(Member Public Investment and Accounts Committee)
Signed…………………………………
Date………………………….…..
Hon Jacob Endom,
(Member Public Investment and accounts Committee)
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