The Path to Zero Fault Audits - Transforming Public Financial Management in Kenya
DOI:
https://doi.org/10.47604/ijfa.3707Keywords:
Zero Fault Audits (ZFA), Financial Transparency, Accountability, Public Sector, Agency Theory, CorruptionAbstract
Purpose: The practice of "zero fault audits" has been used to increase the efficiency of audits in developed and African countries. In Kenya, the Government has started a transformative "Zero Fault Audit" program launched by the Office of the Chief of Staff and Head of the Public Service. This undertaking seeks to change the behavior of public institutions to embrace disciplinary financial grievances characteristics and compliance by eliminating audit queries from the Office of the Auditor General.
Methodology: Zero Fault Audit relies on agency theory whereby it is important to have proper internal control and accountability mechanisms that ensure that the public officials (agents) act in the best interest of the public (principals). In the stewardship theory, public servants are assumed to have proper motives for the efficient governance of public resources. Thus, the results derived from the survey indicate that audit-free public organizations can achieve similar results in the subsequent year and, therefore, may be permanent champions among public organizations in the sphere of public financial management.
Findings: This article provides an overview of the theory under which the ZFA campaign will be conducted, outlines forces that are likely to drive the campaign, and defines basic features and strategies that are likely to shape the campaign.
Unique Contribution to Theory, Practice and Policy: The main objective is to minimize the reputational risks associated with audit findings, which include corruption, wasting resources, and lack of value for money, thereby affecting the effectiveness of development programs and efficient use of public funds.
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