KNBS on brink of collapse, says Gathungu

the Kenya National Bureau of Statistics is going broke, a new audit has revealed.

The report has cast doubt on whether the organisation will be able to sustain its activities in the near future.

Auditor General Nancy Gathungu said if something is not done soon to reverse the negative trend, the agency will collapse.

The audit shows KNBS recorded a deficit of Sh350 million in the year ending June 30, 2023.

The previous year, KNBS reported a budget deficit of Sh1.4 billion, Sh1.7 billion in 2021 and Sh3.6 billion in 2020.

Gathungu said in the past five years, the agency’s revenue reserve reduced from Sh8.7 billion ( 2019 ) to Sh1.3 billion last year.

“The bureau is likely to face financial challenges in the future if strategies are not in place to reverse the trend,” she said.

The auditor downplayed the assertions by the management that the agency has the resources to continue in business for the foreseeable future.

In the application of the going concerns concept of accounting, KNBS said it computed depreciation on the basis of the expected economic life of fixed assets other than their current market value. 

It said the computation was with the assumption that operations will continue for an indefinite period and the assets will be used until they are fully depreciated. 

KNBS said it is not aware of any material uncertainties that may cast significant doubt on its ability to continue operating as a going concern.

The Macdonald Obudho-led agency told auditors that the bureau held cash in banks as part of its reserves.

However, the auditor general maintained that the steps were not satisfactory.

“My opinion is not modified in respect of this matter,” Gathungu said, casting a spotlight on the crucial agency.

KNBS collects, analyses and disseminates statistical data for the government and other agencies, including the private sector. It is also the agency that conducts the national census, with the next one due in five years.

Among its data sets is the economic survey – released annually, the lead economic indicators (monthly), consumer price indices, inflation, interest and exchange rates.

The bureau is also required to publish the gross domestic product report every three months, with strict timelines.

Other quarterly official statistics reports include Labour Survey report (to track employment numbers) and the balance of payment reports.

Gathungu also cast doubt that the agency will recover some Sh55 million it is owed.

The amount includes staff imprest of Sh4.4 million relating to the 2009 Kenya Population and Housing Census.

Some Sh23.6 million accounts to debtors, of which Sh23.4 million relates to an enterprise resource programme development debt.

The audit shows the latter is subject to a court case. Gathungu said Sh2.9 million is for staff debtors, of which Sh1 million is owed by staff who left the agency through resignation or retirement.

“In the circumstances, the accuracy, recoverability and fair statement of the receivables of Sh55 million could not be confirmed,” she said.

The auditor general raised concerns that the bureau was yet to address her past queries satisfactorily.

“In the previous year’s audit report, several issues were raised under the report on lawfulness and effectiveness in use of public resources…which have remained unresolved as at June 30, 2023,” she said.

Part of the outstanding queries involved unsettled imprest claims of Sh4.4 million relating to the 2009 census.

KNBS said it advanced funds to the then 158 district commissioners to facilitate the payments of suppliers, field census personnel who did not have bank accounts as well as security officers and village elders.

Out of the number, 10 did not surrender Sh4.4 million. “The bureau has in the past sought the assistance of the Interior department in recovering the un-surrendered imprest.

On March 24, 2020, the bureau wrote to the Treasury seeking approval to write off the amount and response is still awaited,” KNBS said.

The agency said it has improved in processing and accounting of imprest surrenders. “The process is a regular and ongoing activity. Further, monthly payroll recoveries are being done.”