Section 192 of the Public Finance Management Act (2012) in Kenya establishes the Public Sector Accounting Standards Board (PSASB), which plays a critical role in setting accounting standards for the public sector in Kenya. Here’s an overview of its composition and operational structure:
Composition of the Public Sector Accounting Standards Board of Kenya
- Representatives: The Board comprises representatives from key financial and professional bodies in Kenya, serving on a part-time basis. These include:
- The National Treasury
- The Controller of Budget
- The Intergovernmental Budget and Economic Council
- The Auditor-General
- The Institute of Certified Public Accountants of Kenya (ICPAK)
- The Association of Professional Societies of East Africa
- The Capital Markets Authority
- The Institute of Internal Auditors
- The Institute of Certified Public Secretaries of Kenya
- Chairperson: The Cabinet Secretary responsible for financial matters appoints the chairperson of the Board from among the nominated members.
Appointment and Term
- Nominations: The respective organizations nominate members to the Board, ensuring that nominees are certified and in good standing with a recognized professional body in accounting or finance in Kenya.
- Cabinet Secretary’s Role: The Finance Cabinet Secretary appoints the Board members, except for ex-officio members, for a term not exceeding three years.
Operational Structure
- Secretariat Services: The National Treasury provides secretariat services to the Board, assigning or appointing necessary support staff to enable the Board to effectively perform its functions.
- Procedures: The Board has the autonomy to establish and regulate its own operating procedures, ensuring flexibility and effectiveness in its operations.
The establishment of the PSASB under the Public Finance Management Act (2012) is a significant step in enhancing transparency, accountability, and professionalism in public sector financial management in Kenya. By involving representatives from key financial and accounting bodies, the Board is well-equipped to develop and enforce standards that align with both national and international best practices in public sector accounting.
The Public Sector Accounting Standards Board (PSASB) of Kenya has a pivotal role in establishing and maintaining financial and accounting standards for state organs and public entities. Here are the detailed functions and operational aspects of the PSASB:
Functions of the PSASB
- Setting Standards: The Board sets generally accepted accounting and financial standards to ensure uniformity and consistency across all levels of government and public entities.
- Prescribing Accounting Practices: It prescribes the minimum standards for maintaining proper books of account for government entities at all levels.
- Formulating Audit Procedures: The Board formulates internal audit procedures that comply with the Public Finance Management Act, enhancing the integrity of financial management.
- Financial Reporting Formats: It prescribes formats for financial statements and reporting, ensuring standardized and transparent financial disclosures by state organs and public entities.
- Publication and Publicity: The Board publishes and publicizes the accounting and financial standards, directives, and guidelines it prescribes, ensuring accessibility and awareness.
- Implementation Dates: In consultation with the Cabinet Secretary for Finance, it gazettes the effective dates for the implementation of these standards and guidelines.
- Promoting Financial System Management: The Board performs other functions related to advancing financial and accounting systems management and reporting in the public sector.
In setting these standards, the PSASB considers international accounting practices and the capacity of the entities to comply with these standards. It may set different standards for different categories of entities to ensure relevance and practicality.
Monitoring and Transparency
The PSASB monitors adherence to these standards by all state organs and public entities, promoting transparency, accountability, and the constitutional values and principles of effective, prudent, and efficient management of public resources.
Vacation of Office and Remuneration
- Resignation and Removal: Board members can resign by writing to the chairperson or may be removed for reasons such as absenteeism, bankruptcy, conviction of a crime involving dishonesty or fraud, incapacitation, or if their nomination is withdrawn by the nominating institution.
- Remuneration: The Salaries and Remuneration Commission determines the remuneration for the Board members.
The operations and governance of the PSASB are designed to ensure that public financial management in Kenya is conducted according to high standards of accountability and transparency, reflecting the principles outlined in the country’s legal framework and international best practices.
For more detailed information and resources, the PSASB’s official website is psasb.go.ke.
