Governance & Risk Management
Public Sector Accounting Standards Board (PSASB) is mandated by sections 194 of the PFM Act, 2012 to prescribe frameworks and set generally accepted standards for the development and management of accounting and financial systems by all State organs and public entities. The Board mainstreams best practices for good governance, internal controls and risk management.
Risk management is a critical element of corporate governance in public sector entities regarding their structures, processes, corporate values, culture, and behaviour. It is a cornerstone of an entity’s architecture for strategic and operational success and needs to fit well as a management process within the governance framework. Risk management processes are monitored through ongoing management activities, separate evaluations or both.
The Governance and Risk Management section is domiciled under the Internal Audit Directorate, which provides frameworks, guidelines, templates and procedures for the improvement of risk management and governance processes within the public sector and across the country.
In executing the Board’s mandate, the Directorate prescribes risk management frameworks, champions best practices in risk management, and supports public sector entities to manage risks effectively. The Directorate works in close collaboration with the Internal Auditor General’s Department, National Treasury, and other stakeholders. It also promotes a Government-wide Integrated Risk Management approach using a holistic system to enhance Government risk management capacity.
The functions of the directorate on governance and risk management include:
- Prescribing risk management standards.
- Providing Risk Management Guidelines and templates for risk management.
- Facilitates consistent implementation of the issued standards, frameworks and procedures.
- Promoting Government wide integrated approach.
- Capacity building initiatives in the Public Sector.
- Undertaking research on matters risk management.
- Responding to technical queries on risk management to promote good governance.
The directorate has undertaken the following activities:
- Developed draft Public sector risk management guidelines to provide a consistent approach for public sector entities in developing risk management frameworks and processes for efficient and effective management of risks throughout the public sector.
- Developed draft Government Wide-Integrated Risk Management policy that establishes a framework using a whole of government and whole of society approach to increase the government risk capacity by improving its ability to anticipate, prepare for and handle the wide range of possible crises and global shocks that could harm the country interests, citizens and businesses.
In the execution of its mandate on the Governance and Risk Management the directorate is currently in active collaboration with other stakeholders including:
- The National Treasury and Planning.
- Internal Auditor General’s Department (IAGD).
- Kenya Institute for Public Policy Research and Analysis (KIPPRA).
- Public Financial Management Reforms Secretariat: Upscaling PFM Reforms relating Risk Management in the Public Sector.
- Institute of Internal Auditors (IIA Kenya).
- Risk Management Professional Bodies.