The National Treasury’s spending plans in the financial year ending June, 2026 met their toughest gatekeeper yet as Controller of Budget Margaret Nyakang’o blocked the use of Sh72 billion, a record high in the last fiscal cycles.
Ms Nyakang’o, tasked by the Constitution as Kenya’s fiscal disciplinarian, rejected the withdrawal of the funds, blocking Treasury CS John Mbadi from handing blank cheques to top bureaucrats who spend billions to run their offices at the expense of essential services.
Those Controller of Budget’s rejections were in relation to spending under Article 223 of the Constitution, which allows agencies to bypass Parliament’s approval when amounts approved in budget fall short, or in case of an emergency.
It permits the use of cash without appropriation by MPs during instances such as disasters, or crucial uses that had not been captured in the budget. That spending must, however, be brought to Parliament’s attention within two months of happening.
Since July 2022, Treasury has approved the withdrawal of Sh523 billion under Article 223 of the Constitution by all national government agencies, out of which the COB has rejected Sh158.6 billion.
The COB, an independent budget oversight office, is now recommending for the review of laws governing the criteria for funding under Article 223 of the Constitution, and control mechanisms “to ensure fiscal integrity and safeguard budget credibility.”
Dr Nyakang’o has maintained her caution over continued misuse of the law to bypass MPs’ approval before public funds are used, with many instances involving use of money on areas that do not qualify.
Controller of Budget Dr Margaret Nyakang’o.
Photo credit: Wilfred Nyangaresi | Nation Media Group
Among State institutions with rejected claims in the billions during the 2025/26 financial year was the Presidency, which encompasses State House and the Offices of the President, Deputy President and Prime Cabinet Secretary.
Ms Nyakang’o rejected the Presidency’s requests to withdraw Sh7.8 billion, whose use the Treasury had already green lit.
The offices requested withdrawal of the funds from the official government account under Article 223 of the Constitution.
During the 2025/26 fiscal year, Treasury approved the three offices to withdraw Sh12.9 billion from the Consolidated Fund under Article 223 of the Constitution, but Dr Nyakang’o authorized their withdrawal of Sh5.1 billion, or 39 per cent of the requested amounts.
“The COB observed that some of the approvals under Article 223 of the Constitution concerned routine, day-to-day office operations but had not been allocated funds in the budget formulation process. This resulted in the COB seeking clarification as to whether approvals by the CS complied with the criteria set in Paragraph 40 (3) and (4) of the Public Finance Management (National Government) Regulations 2015 on whether the purpose for which approval is sought for a supplementary budget was foreseeable and known during the formulation of the Budget Estimates,” COB’s report on national government budget implementation for the year states.
It shows that in the year to June 2026, Treasury approved the withdrawal of Sh281.5 billion under Article 223 of the Constitution for all national government agencies, but the COB authorized Sh209.4 billion.
National Treasury and Economic Planning Cabinet Secretary John Mbadi.
Photo credit: File | Nation Media Group
This means that requests amounting to Sh72 billion were rejected, the highest amount in the past five years. The three offices accounted for 10.8 per cent of the rejections.
Between August 9 2025 and April 6 this year, CS Mbadi issued six authorisations for the withdrawal of Sh11.8 billion by State House under Article 223 of the Constitution, to “cater for other operating expenses”, a COB report on budget implementation by the national government shows. It did not provide clearer specifics of what the expenses constituted.
President William Ruto at State House, Nairobi on June 23, 2026. He has said that a "final version" of a new funding model proposal was before Parliament and urged MPs to fast-track its approval.
Photo credit: File | Nation Media Group
Out of the six approvals granted by Treasury, however, the COB only authorized the withdrawal of Sh4.45 billion, rejecting four requests to withdraw a cumulative Sh7.3 billion.
The report also shows that the COB delayed for up to four months to grant approvals for some of the withdrawals, and her approvals were staggered as she allowed transactions of smaller amounts than the Treasury did.
Among rejected withdrawal requests was a Sh5 billion approved by CS Mbadi on December 12, 2025, a Sh1 billion request approved by Treasury on April 6, 2026, and two approvals for withdrawal of Sh800 million that CS Mbadi approved in October and December 2025, all to cater for other operating expenses.
“The COB recommends that expenditure under Article 223 of the Constitution should be used strictly in line with the requirements on use of Article 223, which is for expenditure that was unforeseen at the time of budget formulation or of an emergency nature,” DR Nyakang’o said.
Dr Nyakang’o also declined to approve the withdrawal of Sh418.7 million by the office of DP Kindiki, largely for hospitality and to hire transport.
Deputy President Kithure Kindiki.
Photo credit: DPCS
The National Treasury between October last year and April 2026 granted four approvals for the office to withdraw Sh1.05 billion under Article 223 of the constitution.
CS Mbadi on October 2, 2025 authorised the withdrawal of Sh550 million “to cater for hospitality supplies & services, hire of transport and other operating expenses.”
COB Nyakang’o, however, approved the withdrawal of Sh245.5 million of the amount by the office, and her approvals came three and four months later, in January and February this year.
Another approval of Sh200 million by CS Mbadi for “hospitality supplies and services and for other operating expenses” by the DP’s office was downgraded to Sh129.3 million when the COB authorized withdrawals nearly two months later, in February this year.
Treasury had approved a request for withdrawal of Sh80 million by PCS Mudavadi’s office on December 4, 2025, but the COB did not authorize any withdrawal.
Prime Cabinet Secretary Musalia Mudavadi.
Photo credit: Reuters
A request by the Executive Office of the President to access Sh318.5 million to pay pending bills left by the Nairobi Metropolitan Services was allowed by both offices, Treasury and the COB.
The trend in seeking to spend cash before MPs grant approvals are emerging amid new details showing that offices under the Presidency, which include President William Ruto’s office, State House, the offices of DP Kindiki and PCS Mudavadi, and the state departments for Parliamentary Affairs and Cabinet Affairs, spent a cumulative Sh33 billion during the year.
Much of the spending by the offices run by highest ranking government officials has been on recurrent activities such as paying salaries, hosting events and expenses associated with travel.
