Parliament warns of gaps in Treasury’s Sh2.2trn budget

Money Markets

Treasury secretary Henry Rotich. PHOTO | FILE 

By GEOFFREY IRUNGU, girungu@ke.nationmedia.com

In Summary

• Parliamentary Budget Office questions allocation of billions to mystery projects.

The Treasury has allocated billions of shillings to dozens of mystery projects in the Budget for the year starting July, raising concerns about possible loopholes for leakages and embezzlement of public funds.

Experts in the Parliamentary Budget Office (PBO), which advises Parliament on the matter, say in a report that they found duplicated allocations, unexplained budget items, missing project descriptions and a lack of supporting documents.

The Treasury has, however, not given Members of Parliament the information they need to scrutinise the proposed spending despite being required to do so by law, the report says.

Treasury secretary Henry Rotich had not responded to queries raised in the PBO report by the time of going to press.

The Treasury has, for instance, increased overall expenditure for ministry departments and agencies by Sh97 billion without providing enough details on increments to Defence, Planning, Environment, Livestock and Fisheries.

The PBO notes that the Treasury is also setting aside Sh5 billion for emergencies (or civil contingency reserves) even as the State Department for Devolution gets another Sh1 billion for the same purpose.

“The allocation of funds for a similar function in two separate agencies raises the concern of duplication of functions,” says the PBO, while pointing out that the State Department for Devolution’s allocation has no outputs listed to allow for future performance review.

Other mystery items and discrepancies are a Sh5 billion Treasury allocation for “temporary employees”, and a lack of detail on how the Sh6 billion recently allocated for tourism recovery will be spent.

The Budget does not present a full list of projects to be implemented in 2015/16 or the budgets for State agencies, the public finance experts say.
“Information provided [on allocations to State corporations] is general and given as one-line items with no details,” says the PBO.

These loopholes, budget experts warn, indicate possibilities for leakage or embezzlement of public funds.

“One would want to know about these projects. Where are they, at what stage are they in implementation? Generally, their status should be known. But when we ask the Treasury we are told they are too many to fit in the Budget Estimates documents,” said John Kinuthia, a public finance expert with the Nairobi office of International Budget Partnership.

The lack of detail makes tracking the use of public funds impossible.

“It is not possible to tell what the money will be used for even though you will see there is a provision or line showing ‘Grants to State agencies’,” said Mr Kinuthia.

It also makes double allocations harder to find in cases where the national government allots money to an item for which a county has also set aside funds.

“With the huge increase in development spending, you would expect more transparency on the projects being funded,” said Mr Kinuthia.