President Willian Ruto's Cabinet on Thursday, March 7, approved the transition of accounting models in all government institutions.
In a Cabinet Disptach, it was highlighted that all government agencies would transition from the current cash-based system to the accrual accounting system which will promote accountability in the use of public resources.
"Cash Basis of Accounting is a method in which receipts or payments are recorded when actual cash is received or paid. This method, therefore, does not include critical information for enhancing accountability.
"On the flip side, Accrual Basis of Accounting is a method in which revenue or expenses are recorded when a transaction occurs. This method enhances reporting on liabilities, pending bills and other liabilities," read the dispatch in part.
As highlighted in the Cabinet, the transition between the two accounting systems will be done in three years.
Ruto's Cabinet explained that the transition would help in the long run, citing several pending bills that have been reported across several govt institutions.
"The change has become necessary, Cabinet said, because of increased pending bills, and stalled and delayed government development projects." read the dispatch in part.
Ruto's Cabinet adopted the new accounting system following recommendations by the National Treasury and the Public Sector Accounting Standards Board.
As of June 2023, pending bills in the national government stood at Ksh481 billion while counties owed various suppliers in the country Ksh159.9 billion.
On the other hand, the Cabinet also approved various defence agreements between Kenya and other countries across the globe.
Some of the Memorandum of Understandings (MoUs) that were ratified in the Thursday Cabinet were between Kenya and Mozambique, the Netherlands and the United Arab Emirates (UAE).
"The National Policy on Linking Industry to Education, Training and Research was also approved. This policy, Cabinet resolved, will address the weak links between the world of work, schooling and training, and between industry and research," read the dispatch in part.
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