JOHN MBADI makes first major move to change how things are done in Government – You won’t believe what he did

Sunday, September 1, 2024 – New Treasury Cabinet Secretary John Mbadi has changed how the government will account for your money.

This is after he appointed a Steering Committee, led by the Treasury Principal Secretary, to oversee the transition from cash-based to accrual-based accounting across both National and County Governments.

The announcement is expected to have far-reaching consequences for Kenya's financial management system, particularly in how the government handles public debt and pending bills.

This shift is seen as a long-overdue move towards aligning Kenya with international accounting standards. The decision to move to accrual accounting was approved by the Cabinet on 7th March 2024, with an implementation timeline set for 1st July 2024.

The Steering Committee, which will be in place for three years, has been tasked with providing overall direction and coordination during this transitional period.

The current cash-based accounting system, which records transactions only when money is paid out or received, has long been criticized for its limitations. 

It does not allow for the comprehensive recording of pending bills, a major issue that has plagued both national and county governments.

Accrual accounting, on the other hand, recognizes income and expenditures in the period they are earned or incurred, regardless of when the cash is exchanged.

By adopting this system, Kenya aims to streamline its financial operations, improve transparency, and enhance the credibility of its financial statements.

The Kenyan DAILY POST