How to Read and Interpret the Reports by the Auditor General (Part 1)

By George Gĩthĩnji Last updated on
How to Read and Interpret the Reports by the Auditor General (Part 1)

This is part 1 of how to read and interpret the reports by the auditor general.  The information is provided courtesy of IBP Kenya. The focus is on the different terms and opinions that the Auditor General employs in the audit reports. The terms apply for both the national and the county governments.

The examples are drawn from the Nairobi County Government audit report for the FY 2014/15.

See Also: How to Read and Interpret the Reports by the Auditor General (Part 2)


Unsupported Expenditure

A government ministry reports an expenditure. However, it does not provide enough documentation to show for sure that-

  • the spending was authorized (by the legislature), or
  • it received good and services for the expenditure.

This is called “unsupported expenditure”. They key information here is absence of supporting documentation. Here is an example of unsupported expenditure.

Example of unsupported expenditure.

Excess Expenditure

The government ministry overspends its budget without authorization (of parliament). A ministry has a “vote” of spending, that is, when Parliament tells them how much they can spend. If the vote is exceeded without proper authorization, then this is called “excess expenditure” or “excess vote”.

The key information here is spending more than the allocated money without authorization. Here is an example of excess expenditure.

Example of excess expenditure.

Pending Bills

They arise when a ministry commits to pay for goods and services, and receives those goods and services, but does not settle the bill within the financial year. Pending bills are a problem because government works on a single-year budget and a ministry must have cash and book expenditure when it happens. All money that is not spent is returned to the Treasury to be budgeted afresh the next year. There is no basis for carrying forward commitments.

An example of pending bills.


These are cash advances when government officers travel or attend meetings that must be returned or accounted for with proper records. They are often not returned or accounted for and sometimes officers who have failed to account for them are allowed to obtain new imprests against government policy.

Example of imprests.


What opinion does the Auditor General have on financial statements (or audit reports)?

Unqualified certificate

This means that there are no problems with the documentation reviewed by the auditor and the ministry has managed funds properly.

Qualified Opinion

A qualified opinion is when the auditor has found some problems but they are not pervasive (widespread or persistent). The auditor received all the information required for audit, but his audit reveals some gaps in adherence to procedures and budgets.

Adverse Opinion

An adverse opinion is when the auditor general is able to review the ministry’s documentation, but the problems found are pervasive and will require considerable changes to rectify. This kind of finding should be of concern to oversight bodies.


A disclaimer is when the auditor is unable to fully review the ministry’s documentation because there is a substantial amount of information that has not been made available. In such a case, the auditor feels unable to determine whether the situation is qualified or adverse because the paperwork is not adequate. This is a serious lapse in compliance and should be of concern to oversight bodies.

Example of a disclaimer opinion.

(Also, see: Media must understand that money that isn’t accounted for isn’t always looted)

George Gĩthĩnji is a political and social commentator. Twitter @EpikKenyan
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  1. It is indeed good that you inform the people the story behind the terminologies. When a media house headline screams 'Only 1 % of expediture is legal' we see an outcry from the people yet its not the fact.


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