One of the major points of concern raised by the MPs was the failure of state corporations to provide proper land ownership documentation. The Child Welfare Society of Kenya (CWSK) and the National Social Security Fund (NSSF) were cited for not having title deeds for some properties. Worse still, in some cases, their lands have been illegally acquired by private developers. Additionally, the Kenya Institute for Public Policy Research and Analysis (KIPPRA), while possessing a title deed for its land, faces significant access challenges due to fencing by the Department of Veterinary Services, which obstructs the institution’s operations
Concerns have been raised in the National Assembly over the alarming lack of proper documentation and governance structures in state corporations, with lawmakers demanding swift action to address the issues that have long affected the efficient management and oversight of public entities. In a comprehensive report tabled before the National Assembly, the Public Investments Committee on Social Services Administration and Agriculture (PIC-SSAA), led by Navakholo MP Emanuel Wangwe, highlighted several critical issues facing state corporations. These include the absence of title deeds for state-owned lands, delays in constituting necessary boards, and a troubling lack of financial oversight.
One of the major points of concern raised by the MPs was the failure of state corporations to provide proper land ownership documentation. The Child Welfare Society of Kenya (CWSK) and the National Social Security Fund (NSSF) were cited for not having title deeds for some properties. Worse still, in some cases, their lands have been illegally acquired by private developers. Additionally, the Kenya Institute for Public Policy Research and Analysis (KIPPRA), while possessing a title deed for its land, faces significant access challenges due to fencing by the Department of Veterinary Services, which obstructs the institution’s operations.
These land ownership issues have led to several litigations, which have been pending in court for an extended period, despite repeated calls by the National Assembly to expedite their resolution. The MPs were particularly concerned about the slow pace of resolving these cases, some of which have been dragging on for years, affecting the operations of these critical public institutions.
In response to the issue, the committee has directed the Cabinet Secretary for Land, Housing, and Urban Development and the Chairman of the National Land Commission (NLC) to place caveats on all state corporation lands currently in private hands. This action is expected to take place within the next two months, after which a detailed report will be submitted to the National Assembly.
Further, the committee has instructed accounting officers to work with the NLC to prioritize and expedite the resolution of land ownership disputes affecting state corporations, with a six-month deadline set for reporting back to Parliament on the status of these cases.
The MPs also recommended that the National Assembly consider enacting a law requiring all public land ownership documents to be held centrally by the National Treasury to ensure their safekeeping and prevent further loss or illegal acquisition.
Governance Concerns: The Issue of Boards
Another major issue raised was the delay in constituting or filling vacancies on the boards of state corporations. Some of these entities have been operating without fully constituted boards for extended periods, leading to governance challenges and inefficiencies in decision-making.
The committee pointed to several examples, including the Sacco Societies Regulatory Authority, which lacked a substantive Chairman for over a year, from February 6, 2017, to September 20, 2018. Similarly, the National Social Security Fund (NSSF) had senior officers serving in acting capacities for periods far beyond the six-month limit stipulated by the Public Service Commission Act (CAP 185). This failure to constitute proper boards has hurt the governance and management of these institutions, leading to poor oversight and strategic planning.
In response, the committee has called on the appointing authorities to fill vacancies in the boards of state corporations promptly. The committee also recommended that amendments be made to the State Corporations Act to ensure that no state corporation should make financial commitments without a properly constituted board of directors. This process is expected to begin within three months of the adoption of the report.
Financial Oversight: Impressive Accountability and Audit Delays
The committee also addressed concerns about financial accountability within state corporations. MPs noted that many accounting officers have failed to ensure that imprests (advance payments) are surrendered within the required seven-day period after officers return to their workstations. This non-compliance with the Public Finance Management (National Government) Regulations of 2015 has contributed to a lack of financial discipline and accountability in these institutions.
To address this, the committee has directed that accounting officers who fail to recover outstanding imprests within six months be surcharged the full amounts. Additionally, the committee has recommended that the Auditor General receive detailed status reports on the recovery of these imprests for audit and verification.
Another area of concern was the delay in submitting necessary documents to the Auditor General for review. The committee found that some accounting officers failed to provide the required financial and accounting records promptly, which led to unnecessary queries and delays in the audit process. This failure to comply with the Public Audit Act of 2015 and the Constitution, which mandates the submission of documents within three months of the close of the financial year, has resulted in financial mismanagement and a lack of transparency. The committee has called for the prosecution of accounting officers who fail to provide necessary documents for audit, by the provisions of the Public Audit Act.
The report concludes with a series of recommendations aimed at improving the management and governance of state corporations. These include:
- Expediting the acquisition of title deeds for state corporation lands, resolving land disputes, and ensuring legal action is taken against private individuals who have illegally acquired public land.
- Constitution of boards within three months, with an emphasis on filling vacancies promptly to ensure proper governance and oversight.
- Accountability for imprests by ensuring all outstanding imprests are recovered and submitted for audit.
- Strengthening the role of the Auditor General by holding accounting officers accountable for delays in submitting financial records.
The committee’s report reflects the urgency of addressing these governance and financial management issues to ensure that state corporations function efficiently and transparently. The National Assembly will now review the recommendations and take the necessary legislative and administrative actions to address the problems outlined in the report.
