State House hit as Budget Controller rejects Sh47bn cash requests
A view of State House in Nairobi.
What you need to know:
- Among requests that were not approved included one by the State House in July to spend Sh400 million to purchase vehicles.
- The Controller of Budget also declined requests by four State agencies for cash to settle pending bills totaling Sh12.6 billion.
The Controller of Budget (COB) rejected requests by the State House, 18 Ministries, and State agencies to spend more than Sh47 billion under an emergency clause in the six months ended December, approving only Sh3.29 billion of the Sh51 billion requested without MPs approval.
Most of the 31 spending requests made between July and December 2023 were for non-urgent causes prompting the Controller of Budget Margaret Nyakang’o to approve just six of the applications.
Among requests that were not approved included one by the State House in July to spend Sh400 million to purchase vehicles and another in October to spend Sh700 million in the construction of a modern presidential dais at the State House gardens.
The COB also declined requests by four State agencies for cash to settle pending bills totaling Sh12.6 billion, two requests by the Ministry of Energy in August to spend Sh18.4 billion stabilising fuel prices for August and September, and a request by the Ministry of Defence in November to spend Sh200 million supporting operations in response to El Nino.
The requests were under Article 223 of the Constitution, which allows the government agencies to access additional funding during the financial year if the budgeted amount is insufficient or a spending need for a purpose for which no amount had been budgeted for, arises.
“In the first six months of the financial year 2023/2024, the COB authorised a total of Sh3.29 billion under Article 223 of the Constitution. This amount was 0.07 per cent of the gross budget estimates and, therefore, within the 10 per cent ceiling set out in Article 223 of the Constitution,” COB Margaret Nyakang’o stated, in her report on national government budget implementation review report, running July to December 2023.
In October, the State Department for Immigration requested to spend Sh500 million for the purchase of E-Passport booklets, a request that was not approved, the COB budget implementation review report for the six months ending December notes.
The request by the State Department perhaps explains the reason why Kenyans have been struggling to get passports at the Department of Immigration, and its admission in recent weeks, that it did not have passport booklets.
“Applicants with urgent travel needs are advised to present their proof of urgency at dedicated counters in all passport application centers countrywide,” the Director of Immigration, Evelyn Cheluget told the Nation last month.
The State Department for East African Community in September also requested to spend Sh16.3 million in the purchase of the Cabinet Secretary’s official motor vehicle, which was declined by the COB.
The State Departments for Youth Affairs and the Arts, and MSMEs in August also made two requests to spend Sh250 million and Sh470.4 million under Article 223 of the constitution as an emergency for the closure of Kenya Youth Employment Opportunities (KYEOP) and to cater for KYEOP’s pending obligations, but the COB declined to approve the expenditures.
A request by the State Department for Tourism to spend Sh1.58 billion for the facelift of the Kenya International Convention Center (KICC) in August was equally declined, as was the State Departmental for Internal Security and National Administration’s request in October to spend Sh660 million for cater for settlement of Mau forest evictees.
“In line with Article 223 (2) of the Constitution, the consent of Parliament should be obtained or sought within two months after the first withdrawal of the money. If Parliament is not sitting during the time contemplated in clause (2) or is sitting but adjourns before the approval has been sought, the approval should be sought within two weeks after its next sitting,” the COB says in the report.
The report also notes that a request by the Treasury to spend Sh450.7 million to cater for Value added Tax (VAT) refund to the US Embassy, made in August, was not approved.
Failure by the COB to approve spending requests under Article 223 of the Constitution comes about two months after the Auditor-General released a special report on utilisation of funds spent under the emergency requests, which exposed wastage and instances where billions of cash could not be accounted for.
Among the key gaps the audit revealed in the spending under Article 223 of the Constitution and the supplementary budgets was the lack of public participation in it, which ended up giving room to state agencies to misuse the process, spending huge sums on activities that were not necessarily emergencies.
“Citizens’ efforts are also often nullified without meaningful public participation in the preparation and approval of the supplementary budgets. After ten (10) months of involvement throughout the budget formulation process, the original budget incorporates public priorities, but these are then revised contrary to what had been approved, without further public engagement,” the Auditor-General said.
The audit established government’s spending under Article 223 of the Constitution had grown from Sh1.1 billion in the financial year 2014/15 to Sh147 billion in the year ending June 2023.
Between July and December 2023, however, the COB approved the spending of Sh3.29 billion under the emergency requests, which included the spending of Sh2 billion by the state department for Asals and Regional development for emergency response interventions between July and September, and the National Cereals and Produce Board’s (NCPB) spending of Sh500 million to purchase excess maize from farmers and Sh448.8 million for the state department for crop development to purchase drying and storage facilities.
The approved amount was about 2.2 per cent of the amount approved during the whole year in 2022/23 and points to the reality that such spending will be greatly cut during the current financial year, a step back from the aggressive growth that spending under the Article 223 of the constitution has had over the past nine years.
