Influence of audit committee roles on quality of public service delivery at Nairobi County Government in Kenya

Abstract

Audit committees play an important duty in financial reporting, performance reporting, internal control systems, and systems oversight of resources allocated for investments in both private and public entities. Previous researches revealed myriad challenges and weaknesses of internal audit. This resulted in inefficient service delivery in Nairobi County Government (NCG). Furthermore, auditor general reports for the period 2014/15 to 2019/20 indicated instances of financial impropriety and financial statements that could not be relied upon giving rise to calls for improved audit committee effectiveness. The general objective of this study was to establish the influence of audit committee (AC) roles on the quality of public service delivery at NCG. Specific objectives focused on the function of financial reporting, performance reporting, systems of risk oversight, and internal control systems on service delivery in county governments in Kenya. This study was anchored on an agency theory of internal audit, systems theory, theory of inspired confidence, and David Flint’s seven postulates of an effective AC. The study used a descriptive research design. The population of the study was 235 the staff of NCG drawn from the County Executive, Audit Committee, Office of the Clerk, Budget and Finance Committee, Auditing Unit, County and Ward Administrators. Simple random sampling and purposive sampling techniques were employed in identifying 148 respondents, then structured questionnaires and in-depth interviews were used for data collection. Regression and correlation analyses of the data were done using a statistical package for social sciences (SPSS) software and presented in form of bar graphs, pie charts, and tables. The study findings avail evidence that the state of service delivery in the county is desolate. These would be avoided and service delivery enhanced with keen establishment of internal audit processes. The findings affirmed that audit committee roles positively and significantly influence the quality of public service delivery at Nairobi County Government. They facilitate public service delivery in NCG through increased accountability, monitoring of county activities, improving professional competence, tracking of county records, monitoring and evaluating County programs, boost employee attitudes thus overall output and early identifying of symptoms of fraud. On the contrary, the study concluded that the county’s financial performance has not improved with internal auditing and financial reporting and neither helped in the redistribution of revenue to county projects. Besides, NCG does not strictly adhere to the PFM Act 2015 on financial reporting. The researcher recommends that while seeking to enhance public service delivery within NCG the county leadership should keenly develop policies and regulations relating to financial reporting, performance reporting, systems of risk oversight and internal control. These should be geared towards ensuring timely audit reporting and implementation. The research further recommends that NCG should enhance its financial performance through enhancing internal audit and financial reporting that should be utilized as a platform for making decisions on the redistribution of revenue to county projects. Besides, NCG should strictly adhere to the PFM Act 2015 on financial reporting. This study is of great importance to devolved county governments in Kenya. It is an eye-opener to both the national and county governments of the need for an independent audit committee that is well funded to carry out its mandate. Hence effectiveness and efficiency in public service delivery and realization of the government’s vision 2030 as well as the big four agenda.