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The Judiciary of the Republic of Kenya www.pwc.com/ke Micro - Assessment of UNDP Kenya ImplementingPartner The Judiciary of the Republic of Kenya [.......... ...................... ,... ...................... August 2015 pwc pwc Catherine Masaka Deputy Country Director - Operations United Nations Development Programme, Kenya United Nations Office in Nairobi Gigiri, Block M, 3rd Level P.O. Box 30218 - 00100 Nairobi, Kenya 6 August 2015 Dea1· Catherine, Subject: Micro Assessment Report to the United Nations Development Programme (UNDP) Kenya and the Judiciary of the Republic of Kenya We are pleased to submit our report on the micro-assessment of the Judiciary, a UNDP Kenya Implementing Partner. The assessment was carried out during the period 30 April to 4 May 2015. Our report is structured into the following parts: 1. Executive summary 2. Financial management assessment 3. Programme management assessment 4. Appendices The micro assessment report has only been prepared for the purpose of providing an overall assessment of the Implementing Partner's programme and financial management capacity that will enable UN Agencies to manage the financial and programme risk of working with partners and may not be suitable for another purpose. Our repo1t is intended solely for presentation to the UNDP Kenya office for the purpose described above and should not be distributed to or used by other parties. We wish to express our appreciation to the UN for the opportunity accorded to us to provide our professional services. We also wish to thank the management and staff of the Judicia1y for their cooperation during the assessment. Yours sincerely For and on behalf of PricewaterhouseCoopers Limited ' PricewaterhouseCoopers Limited. PwC Tower, Waiyaki Way/Chiromo Road, Westlands PO Box 43963 - 00100 Nairobi, Kenya T: +254 (20)285 5000 F: +254 (20)285 5001 www.pwc.com/ke Directors: S Cheruiyot A Eriksson M Karama K Muchiru M Mugasa F Munu S Mutinda P Ngahu R NjoroQ9 S Okello B Okundl K Saiti R Shah J Kabochi U AApata· M Wambugu M Thoithi T Mukora SN Ochieng' A Murage T Almassy# 1• Nigerian)(# Hungarian) Glossary ofterms Abbreviation Full name AWP Annual Work plan CAC Chief Accounts Controller CBK Central Bank of Kenya CIA Chief Internal Auditor CJ The Chief Justice CoB Controller of Budget CoK Constitution of Kenya CPA-K Ce1tified Public Accountant of Kenya CPD Continuous Professional Development CRJ Chief Registrar of the Judiciacy DANIDA Danish International Development Agency - DCAC Deputy Chief Accounts Controller DDoF Director of the Directorate of Finance DHRA Directorate of Human Resource and Administration ,._ DoA Directorate of Accounts DoF Directorate of Finance DPAC Directorate of Public Affairs and Communication DPM Directorate of Performance Management EACC Ethics and Anti-Corruption Commission EU European Union FY Financial Year GFMR Government Financial Management Regulations GIZ German Federal Enterprise for International Cooperation GoK Government of Kenya G-Pay Government Payment HACT Harmonised Approach to Cash Transfers HELB Higher Education Loans Board IAC Internal Audit Committee lAD Internal Audit Department ICPAK Institute of Certified Public Accountants of Kenya ICT Information Communication & Technology IDLO International Development Law Organization Abbreviation Full name I IFMIS Integrated Financial Management Information System IP Implementing Pru.1ner IPMAS Integrated Performance Measurement and Accountability System IPSAS International Public Sector Accounting Standards - ISAs International Standards on Auditing JPIP Judicial Performance Improvement Project JSC Judicial Service Commission JTDPF Judiciary Transformation Development Partners Forum JTF Judicial Transformation Framework JTFSC Judiciary Transformation Framework Steeling Committee JTSP Judicial Transformation Support Project KEN AO Kenya National Audit Office KR.A Kenya Revenue Authority t-- Kshs Kenya Shillings M&E Monitoring and Evaluation NCAJ National Committee on Administration of Justice OtOJ Office of the Ombudsman of the Judiciary PFM Public Finance Management PMC Performance Management Committee PMMSC Performance Management and Measurement Steering Committee PPARB Public Procurement Administrative Review Board - PPD Public Procurement and Disposal PPOA Public Procurement and Oversight Authority PSC Public Service Commission PWDs Persons with Disabilities SC Supreme Court SIDA Swedish International Development Agency TOC Tender Opening Committee USD United States Dollar WB World Bank Table ofContents 1 Executive summary .................................................................................................................................................. 1 2 Financial Management Assessment...................................................................................................................... 27 3 Programme Management Assessment ................................................................................................................. 49 Appendices .................................................................................................................................................................... 66 1 Executive suntntary 1.1 Background ofthe Implementing Partner The Implementing Partner (IP), The Judiciary of the Republic of Kenya, was established by the Constitution of the Republic of Kenya. This was through Chapter 10, Article 159 of the Constitution of Kenya (CoK), 2010. At the time of the assessment, it was one of the three arms of the Government of Kenya (GoK) and thus, it was independent from the Executive and Legislative arms of GoK. 1.2 Approach and methodology To address the assignment requirements, we administered the assessment questionnaire through an interview process. The questionnaire was designed in collaboration with UNDP Kenya to enable us gather and synthesise the information. We reviewed selected documentation and held interviews and discussions with relevant management and staffof the entity. 1.3 Structure ofour report We present our findings in this report under the following headings: Section 1 Executive smnmary Section 2 Financial management Section 3 Programme management We have reported on our detailed findings, recommendations and conclusions in response to all the requirements of the terms of reference in each of the above sections. For each of our findings, we have provided an indication on the severity of risk and identified their root causes. In the table below, we define the risk ratings subsequently used in the repo1t: Score 1 - The GREEN which represents low risk. - An organisation with this rating will have strong capacity to manage the UNDP funds Score 2 - The Blue which represents moderate risk. -An organisation with blue rating will be one which has met most of the basic minimum criteria Score 3 - The AMBER which represents significant risk. - An organisation with amber rating will be one which fails to meet some of the basic minimum criteria Score 4 - The RED which represents high risk - An organisation with red fails to meet most of the basic minimum criteria Micro Assessment for UNDP Implementing Partner. The Judiciary of the Republic of Kenya PwCKenys 1 1.4 Summary ofrisks related to the financial management capacity ofthe implementing partner 1 Implementing 8 5 2-Moderate • At the time of the assessment, the Directorates of Human Resource and Partner risk Administration, Information Communication Technology, Finance and Supply Chain Management were headed by acting Directors pending finalization of the recruitment process commenced by Judicial Service Commission (JSC). These were members of the management team. • At the time of the assessment, the IP was embroiled in various court cases mainly relating to suits filed by current and former staff of the Judiciary. 2 Funds flow 6 6 1-Lowiisk • The IP operated an exchequer bank account that facilitated receipt and disbursement of funds from the National Treasury. The IP also opened separate bank accounts whenever required by the donor financing agreements. • The IP had benefitted from the system of disbursements where its budget was a direct charge to the Consolidated Fund of the GoK run by the National Treasury (NT) at CBK. • The IP had minimal exposure to foreign exchange risks. Also, the accounts and finance Directorates were staffed with competent officers who had capacity to manage foreign exchange risks. 3 Organisational 18 10 2-Moderate • At the time of the assessment, the IP did not have a staffing structure within the structure and risk Directorates of Accounts and Finance. The staff thus relied on the established practice staffing to determine their reporting framework. • Some of the court stations did not have qualified accountants and the accounts function was thus unde1taken by clerks who had gained experience over time and some who had also studied accounts but were yet to be re-designated as Accountants. • The staff were not familiar with the United Nations procedures related to cash transfers (specifically the HACT framework). • The Finance Director was dismissed from employment by JSC and had not been replaced at the time of the assessment. The Directorate of Finance was headed by an acting Finance Director. Micro Assessment for UNDP Implementing Partner. The Judiciary ofthe Republic of Kenya PwCKenya 2 No. Tested subject Total No. Total No. of Overall risk Comments area of risk applicable assessment points questions 4 Accounting 53 45 1 - Low risk I • The IP used an automated accounting system, IFMIS, which was hosted by the NT for
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