The Public Sector Accounting Standards Board (PSASB) in Kenya is established under the Public Finance Management Act, 2012. It is responsible for setting accounting and financial reporting standards for State organs and public entities to ensure transparency, accountability, and fiscal discipline in public finance management.
🔹 Composition of the Public Sector Accounting Standards Board
The PSASB consists of representatives from the following institutions, serving on a part-time basis:
✅ National Treasury
✅ Controller of Budget
✅ Intergovernmental Budget and Economic Council
✅ Auditor-General
✅ Institute of Certified Public Accountants of Kenya (ICPAK)
✅ Association of Professional Societies of East Africa
✅ Capital Markets Authority
✅ Institute of Internal Auditors
✅ Institute of Certified Public Secretaries of Kenya
👉 The Cabinet Secretary (Finance) appoints the Board’s Chairperson from among these members.
🔹 Board members must be certified professionals in accounting or finance and in good standing with a recognized professional body.
🔹 The National Treasury provides secretariat services and necessary support staff to facilitate the Board’s operations.
🔹 Members serve a term of up to three years, with the possibility of reappointment.
🔹 Functions of the Public Sector Accounting Standards Board (PSASB) in Kenya
The PSASB is responsible for ensuring that public sector financial reporting and accounting systems adhere to international best practices and constitutional principles. The Board performs the following key functions:
1️⃣ Setting Accounting and Financial Standards
📌 Develops and prescribes Generally Accepted Accounting Standards (GAAS) for state organs and public entities.
2️⃣ Establishing Internal Audit Procedures
📌 Formulates internal audit procedures that comply with the Public Finance Management Act.
3️⃣ Defining Reporting Formats and Guidelines
📌 Prescribes uniform formats for financial statements and reporting by government institutions.
4️⃣ Publishing and Publicizing Accounting Standards
📌 Ensures that all prescribed accounting and financial standards are published and made publicly available.
5️⃣ Gazetting Implementation Dates
📌 In consultation with the Finance Cabinet Secretary, the Board determines and gazettes the effective dates for implementing new accounting standards.
6️⃣ Monitoring Compliance
📌 Ensures adherence to prescribed accounting and financial standards by all state organs and public institutions.
7️⃣ Promoting Transparency and Accountability
📌 Enhances public finance accountability by enforcing prudent financial management of revenue, expenditure, assets, and liabilities.
8️⃣ Adapting International Best Practices
📌 Incorporates international accounting and financial reporting standards while considering the local capacity of government entities.
9️⃣ Customizing Standards for County Governments
📌 Develops county-specific financial and accounting guidelines that align with national and international best practices.
🔹 Removal and Vacation of Office
A member of PSASB (excluding ex-officio members) may be removed under the following conditions:
❌ Absence from three consecutive meetings without permission.
❌ Declared bankrupt or enters into an arrangement with creditors.
❌ Conviction for dishonesty or fraud-related offenses.
❌ Sentenced to imprisonment for more than six months or fined over KES 100,000.
❌ Physical or mental incapacity preventing them from performing duties.
❌ Withdrawal of nomination by the appointing institution.
🔹 Remuneration of Board Members
💰 The Salaries and Remuneration Commission (SRC) determines the remuneration and allowances for PSASB members.
📌 Conclusion
The Public Sector Accounting Standards Board (PSASB) plays a critical role in strengthening financial accountability, transparency, and reporting in Kenya’s public sector. It ensures that government entities adhere to internationally recognized accounting standards, promoting efficient financial management and public trust. 🚀
