A State Corporations is normally defined as a body corporate established under Section.3 of the State Corporations A State Corporation is a body corporate established under Section 3 of the State Corporations Act, Cap 446, or by an act of Parliament, or under the Companies Act, Cap 486 where the Government controls majority or all of the Shares. Further, a subsidiary of a state corporation is a state corporation.
Frequently asked Questions
What is the distinction between Inspectorate of State Corporation and State Corporations Advisory Committee (SCAC)?
Both are established by State Corporations Act Cap 446 of the Laws of Kenya, enacted in 1986 for purposes of making provision for the establishment and regulation of State Corporations. SCAC provides advisory to the Government on the general administration of state corporations but more specifically advises the President on the establishment, reorganization or dissolution of State Corporations and categorization of State Corporations. The Office of the Inspector General is responsible for advising the Government on all matters affecting the effective running of State Corporations through inspections, performance monitoring, projects monitoring and evaluations, special investigations, audits and undertaking surcharge cases.
Is it not a duplication to have several oversight agencies such as Inspectorate of State Corporations, State Corporations Advisory Committee, Auditor General, Public Procurement Regulatory Authority and Ethics and Anti-Corruption Commission all executing similar functions?
No. Each of the oversight Agencies is established under a specific legal instrument with a specific mandate. These agencies work collaboratively.
Is there a formal complaint and whistle blowing mechanism on mismanagement within State Corporations?
Yes. This is through anonymous and official complaint letters to Inspector General (Corporations), Ethics and Anti-Corruption Commission and other oversight agencies. This website now provides a more easily accessible forum that will be subjected to continuous improvement, but does not invalidate alternative channels.
Isn't the function of investigating misappropriation of funds within State Corporations a duplication of the role of Ethics and Anti-Corruption Commission and the Auditor General?
Audits and investigations are routine undertakings by the Office of Inspector General (Corporations) on behalf of State Corporations Advisory Committee, respective Cabinet Secretaries and Auditor General. The same may also be referred to the Ethics and Anti-Corruption Commission in case for further investigations in where forensic investigation and audits are necessary.
The management is answerable to the Board of Directors for performance and implementation of decisions made. Boards and by extension the management are also answerable to the stakeholders for performance while the oversight agencies continue to hold them accountable for efficiency and effectiveness in their mandate.