Laikipias Relentless Chase For Clean Financial Statements
Updated on: Jan 06, 2021
A salient feature of Governor Ndiritu Muriithis administration is consistent release to the public of countys financial statements. This, being a practice that is more pronounced in the private sector organisations, has put the leadership of County Government of Laikipia in a class of its own.
The governor believes that public entities have the responsibility of laying bare their financial statements to the stakeholder as part of promoting transparency and accountability.
Our ultimate aim is to have clean books with unqualified opinion. Its not easy but we are definitely heading there, says Paul Njenga, the chief officer Finance and Economic planning.
Apart from promoting transparency and accountability, the county government has a more plausible reason for its consistency on releasing its financial results- credit rating. The county has been mulling borrowing from the private sector by floating an infrastructure bond to finance its development. Yes- a county government to float a bond.
The county government has been burning the mid night oil working out ways of improving its score Audited financial statements for year 2018/2019 released late last year revealed the countys journey through the rugged terrain of fiscal balance, the relentless efforts to achieving clean, unqualified financial statements and its rewards so far.
The 2018/2019 financial statements whose release was witnessed by various stakeholders would have been the first for the county with unqualified opinion from the auditor. But according to the auditors, the county overspent on wages after the court temporarily put brakes on planned redundancies.
During the year under review the county government had projected savings from the redundancies. But the workers union obtained court orders temporarily stopping the execution of the process.
The anticipated savings were not realized and the affected workers had to be paid wages not initially planned for. It is on this basis that the auditor qualified the financial statement, otherwise the rest of the books were clean.
Infrastructure Bond Although not out of the woods yet, this was a remarkable feat for a public entity that started off with a disclaimer from the auditors several years ago. It is in financial year 2013/2014 that the auditors issued a disclaimer. This is the worst form of opinion an auditor can issue. It means that the auditor could not obtain or access sufficient audit evidence for individual or aggregate items in order to support their testing and upon which to base an opinion.
In short, the available financial statement could not be relied upon to warrant an opinion. There were a total of 25 matters forming the basis of this opinion. In 2014/2015, the organization got an adverse opinion with matters forming the basis of opinion reducing to 11. This means that the financial misstatements, individually or in aggregate, are both material and pervasive to the financial statements.
The following year 2015/2016, the auditor gave the county a qualified opinion after matters forming the basis of auditors opinion reduced further to eight. The same happened in 2016/2017 when the matters under question dropped further to seven.
In 2017/2018, despite the auditors awarding a qualified opinion the matters forming the basis had slid down from seven to nine. However, the county made a significant leap in 2018/2019 as it made efforts to have clean financial statements. Only one issue stood between it and an unqualified opinion the issue of overspending on wage bill. This was an issue that was contributed by the labour unions and the judiciary.
Unqualified, clean or unmodified opinion means that the financial statements are presumed to be free from material misstatements and are therefore give a true and fair view of the financial position of a public entity.
Despite the setback, there is a lot of efforts being made towards clean financial statements continue.
Top county managers are under strict instructions to keep proper financial records. Anybody whose area turns in adverse opinion will have to separate. In addition, the county has established a directorate of Financial Reporting, continuous staff training and enhanced own source revenue collection.
The governor believes that public entities have the responsibility of laying bare their financial statements to the stakeholder as part of promoting transparency and accountability.
Our ultimate aim is to have clean books with unqualified opinion. Its not easy but we are definitely heading there, says Paul Njenga, the chief officer Finance and Economic planning.
Apart from promoting transparency and accountability, the county government has a more plausible reason for its consistency on releasing its financial results- credit rating. The county has been mulling borrowing from the private sector by floating an infrastructure bond to finance its development. Yes- a county government to float a bond.
The county government has been burning the mid night oil working out ways of improving its score Audited financial statements for year 2018/2019 released late last year revealed the countys journey through the rugged terrain of fiscal balance, the relentless efforts to achieving clean, unqualified financial statements and its rewards so far.
The 2018/2019 financial statements whose release was witnessed by various stakeholders would have been the first for the county with unqualified opinion from the auditor. But according to the auditors, the county overspent on wages after the court temporarily put brakes on planned redundancies.
During the year under review the county government had projected savings from the redundancies. But the workers union obtained court orders temporarily stopping the execution of the process.
The anticipated savings were not realized and the affected workers had to be paid wages not initially planned for. It is on this basis that the auditor qualified the financial statement, otherwise the rest of the books were clean.
Infrastructure Bond Although not out of the woods yet, this was a remarkable feat for a public entity that started off with a disclaimer from the auditors several years ago. It is in financial year 2013/2014 that the auditors issued a disclaimer. This is the worst form of opinion an auditor can issue. It means that the auditor could not obtain or access sufficient audit evidence for individual or aggregate items in order to support their testing and upon which to base an opinion.
In short, the available financial statement could not be relied upon to warrant an opinion. There were a total of 25 matters forming the basis of this opinion. In 2014/2015, the organization got an adverse opinion with matters forming the basis of opinion reducing to 11. This means that the financial misstatements, individually or in aggregate, are both material and pervasive to the financial statements.
The following year 2015/2016, the auditor gave the county a qualified opinion after matters forming the basis of auditors opinion reduced further to eight. The same happened in 2016/2017 when the matters under question dropped further to seven.
In 2017/2018, despite the auditors awarding a qualified opinion the matters forming the basis had slid down from seven to nine. However, the county made a significant leap in 2018/2019 as it made efforts to have clean financial statements. Only one issue stood between it and an unqualified opinion the issue of overspending on wage bill. This was an issue that was contributed by the labour unions and the judiciary.
Unqualified, clean or unmodified opinion means that the financial statements are presumed to be free from material misstatements and are therefore give a true and fair view of the financial position of a public entity.
Despite the setback, there is a lot of efforts being made towards clean financial statements continue.
Top county managers are under strict instructions to keep proper financial records. Anybody whose area turns in adverse opinion will have to separate. In addition, the county has established a directorate of Financial Reporting, continuous staff training and enhanced own source revenue collection.
