KENYA TOWA Project Governance and Anticorruption Financial Management Issues Fiduciary Forum 2008

Kenya TOWA – Financial Management FM Safeguards – Levels of intervention  Institutional Oversight  Management  Community level

Kenya TOWA – Financial Management Level 1 - Risk Management and Oversight Arrangements  Institutional Risk Management Policy Framework  Council Audit Committee  Council Finance Committee  Revised Independent audit arrangements Council functions are independent, appropriately staffed and mandated

Kenya TOWA – Financial Management Level 1- Risk Management and Oversight Arrangements Functions of Council Audit Committee include:  Overseeing the development and effectiveness of Risk Management Policy Framework  Monitoring implementation of audit and review recommendations  Overseeing internal audit function

Kenya TOWA – Financial Management Level 1- Risk Management and Oversight Arrangements Functions of Council Finance Committee include:  Reviewing and approving Quarterly Interim Unaudited Financial Statements – including expenditure, budgets and implementation progress  Monitoring overall performance of the financial management function

Kenya TOWA – Financial Management Level 1- Independent Audit Arrangements  Responsibility vested in the National Audit Office  Strict adherence to reporting deadlines – 6 months after year end  Arrangements for national coverage negotiated  Development of a risk-based approach

Kenya TOWA – Financial Management Level 2 - Management  Implementing the Institutional Risk Management Policy Framework  Effective Internal Audit Function  Outsourced Financial Management Agent – responsible for all disbursements  Management oversight of the FMA well defined  Performance contracts

Kenya TOWA – Financial Management Level 2 - Management Arrangements for Internal Audit Effectiveness:  Periodic institutional risk assessment  Development and implementation of risk based internal audit processes  Technical competence and resourced  Sufficiently covers all spending units  Report at an appropriately high level and effectively monitor implementation of recommendations

Kenya TOWA – Financial Management Level 3 - Community Public Disclosure and Anti Corruption Initiatives include:  Physical structures to facilitate disclosure of public information  Arrangements for receiving and effectively responding to public complaints  Assurance of action against reported incidences

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