Weak Treasury controls put Sh350 billion at risk of theft
Auditor-General Nancy Gathungu during a past event.
About Sh350 billion expected to be collected by government ministries and public institutions as fees and charges for service delivery in the current financial year could be at high risk of loss amid concerns that controls put in place to prevent leakages are inadequate.
This follows President William Ruto's directive that all payments for government services be channelled digitally into a single account. The directive, which took effect in July, means that billions of shillings in service charges will now be paid to the National Treasury through an account gazetted in December 2022, rather than through accounts maintained by public entities.
In the current financial year, Treasury expects Sh348.6 billion in ministerial grants — the money that ministries and government entities collect from the public for provision of services.
But the auditor-general, whose job it is to scrutinise how public funds are spent and advise public institutions on measures to prevent leakages, says there are problems with the structures put in place to ensure checks and balances in the initiative.
“I have already raised some concerns with the Treasury about internal controls. If we decide to put all our eggs in one basket, we must be sure that we have plugged all the loopholes in revenue collection,” Auditor-General Nancy Gathungu told Mr Ndindi Nyoro, chairperson of the National Assembly Budget and Appropriations Committee during an event to educate public servants on the use of a new public financial management (PFM) tool being introduced for the civil service. Her concerns comes against the backdrop of previous reports issued by her office on rampant waste, theft and other leakages and which highlights the risks that may not have been addressed.
On 30 June, the President banned cash payments for government services and directed that all payments be made through Paybill number 222222.
This came as Dr Ruto announced that a total of 5,084 government services had been uploaded to the eCitizen portal, the government's official website for services. This followed the gazetting of the Paybill by the Treasury on December 30, 2022.
“All payments for government services will be made progressively through eCitizen.go.ke, with the unique identifier for individuals being the national identity card for citizens, the alien identity card for foreigners and the official registration number for companies, institutions and organisations," the notice said.
On Monday, however, Ms Gathungu noted that the government was suffering from revenue delays as public entities struggled to migrate to the new system.
“Government departments are now struggling to configure their systems to ensure that they comply with the guidelines that have been issued. There is a lull, a delay, in revenue collection as people are confused about what to do," she said.
But the Treasury says the intention is to consolidate government revenue and payments to avoid scenarios where public entities hold idle cash in commercial bank accounts while the government borrows.
"This is starting and it's already in the law as a requirement in the way we handle our finances, the way we make our payments.”
“What we want to do is consolidate all the payments into one, so that we don't have bank accounts with idle revenue while we are borrowing to pay for services," said Mr Jonah Wala, the director of accounting services at the Treasury.
Ms Gathungu has advocated for regular assessment and evaluation of the PFM system in order to “take timely corrective action to strengthen any weaknesses, plug any gaps and close any loopholes identified which, if not addressed, would be detrimental to our development and positive change in the lives and livelihoods of our citizens”.
Just weeks after the President's directive that all payments for government services should be made digitally and into a single account, Kenyans were hit with a breakdown of digital services at the end of July following cyber-attacks that mainly affected services offered through the eCitizen portal.
The attacks disrupted services including visa issuance, electricity purchase from Kenya Power through M-Pesa and USSD codes, several M-Pesa and other mobile money transactions, and Kenya Railways ticketing services.
