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The Head of Public Service and Chief of Staff Felix Koskei has issued fresh directives following a consultative meeting with all Principal Secretaries, Chairpersons, Board members, Chief Executive Officers (CEOs), Company Secretaries and heads of internal audit in all state parastatals.
Koskei said that the meeting was part of a wider series of structured engagements that his office has initiated with various governance actors across the government.
While issuing fresh directives to parastatal CEOs, the Chief of Staff said that the effectiveness of audit and risk committees in State Corporations is a direct indicator of an institution’s governance health.
He, however, said that audit committees have been understaffed or structurally weak, subordinated to the CEO’s influence, and reduced to ceremonial roles rather than independent oversight.
Koskei warned that CEOs must not interfere in the functioning of audit committees.
“Their independence is protected under the law, and any attempt to undermine their work is a governance offence. From this point forward, boards will be held accountable for the performance and independence of their audit committees,” the Head of Public Service said.
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Felix Koskei issues directives on audit reports
At the same time, the Chief of Staff said that audit reports and public sentiment increasingly reflect the perception that governance in parts of the public sector is ineffective, fragmented, and, in some instances, entirely dysfunctional.
He said that- for instance, audit reports reveal repeated award of tenders to politically connected firms—some without valid tax compliance certificates, while others operating without physical offices or registration.
“One of the most entrenched challenges is procurement malpractice, manifesting in multiple forms: inflated pricing, supplier collusion, uncompetitive single sourcing and blatant disregard for the Public Procurement and Asset Disposal Act, among others,” said Koskei.
While maintaining that the Inspector General of State Corporations recommendations must be acted upon promptly and fully, the Head of Public Service warned that ignoring their findings is a serious breach of the State Corporations Act and amounts to institutional sabotage.
In turn, the Inspector General of State Corporations was expressly directed to expedite recovery of misappropriated or misused funds through surcharges, ensure that audit outcomes are enforced in a timely and decisive manner, and refer unresolved violations to investigative agencies including the Ethic and Anti-Corruption Commission (EACC) and the Directorate of Criminal Investigations (DCI).
Koskei noted that from July 1, 2025, all State Corporations are mandated to conduct 100% of procurement activities through the Electronic Government Procurement (e-GP) system.
He said that they must conduct the procurement activities through the platform launched by the National Treasury in April automating every stage— planning, tendering, evaluation, award, and payment — thereby eliminating human interference.
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Access to Government Procurement Opportunities law
He also maintained that this end-to-end digital system will effectively close the procurement loopholes that have enabled cartels, collusion, and the abuse of the Public Procurement and Asset Disposal Act.
Further, the Head of Public Service highlighted that compliance with the Access to Government Procurement Opportunities (AGPO) law is equally troubling.
Koskei said that many institutions fall far below the required 30% threshold for youth, women, and persons with disabilities, with some parastatals barely allocating 10%.
“This is not a compliance footnote—it is a governance failure with real social consequences, especially for vulnerable groups the law was designed to empower,” he added.
The Head of Public Service further said that any consultations or follow-ups carried out by technical departments within his office with Ministries, Departments, and Agencies (MDAs) are done under his authority and must be given the appropriate attention and full cooperation.
He highlighted that the principle of separation of powers must be upheld, with the Chairperson providing strategic leadership and board oversight, the CEO handling day-to-day management and operational execution, and board members focusing on policy and accountability—each playing a distinct role to ensure effective and transparent governance.
According to Chief of Staff Felix Koskei, the reforms are intended to revive and entrench a culture of effective governance, institutional accountability, and ethical leadership across all institutions and State Corporations.
He emphasized that these reforms are a foundational requirement for improved service delivery and restoring public trust.
Koskei stated that the engagement is a deliberate response to national concerns — a clear message to the people of Kenya that the administration is committed to reversing institutional decline and restoring coherence, efficiency, and integrity in the governance of State Corporations.
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