Controller of Budget flags Sh15.3bn irregular spending by the Treasury

Margaret Nyakang'o

Controller of Budget Margaret Nyakang’o. 

Photo credit: Francis Nderitu | Nation Media Group

What you need to know:

  • Such spending makes it difficult to establish prudent use of public funds, Controller of Budget says.
  • Revelation points to a conflict between Treasury and the CoB over authority to spend public funds.

The National Treasury is breaking the law and spending government money without following procedures, the Controller of Budget (CoB) has warned, noting that such spending lacks transparency.

In less than three months since July, Treasury has spent Sh15.3 billion without notifying CoB Margaret Nyakang’o’s office as required under law, MPs were told yesterday.

The revelation by Dr Nyakang’o points to simmering conflict between Treasury and the CoB over authority to spend public funds.

Dr Nyakang’o told MPs that accounting officers in ministries, departments and agencies (MDAs) have been failing to disclose some expenditures in their organisations, making it difficult to establish whether public money is being put to good use.

“Section 83 of the PFM Act, 2012 requires accounting officers to submit quarterly financial reports to the CoB by 10th of the month following the end of the quarter. Despite this requirement, some of the MDAs did not submit their annual financial reports in time for the office to finalise its annual Budget Implementation Review Report,” Dr Nyakang’o said.

She noted that, among top expenses incurred without notification to her office in the current financial year include Sh2.7 billion by the State Department for the Development of Arid and Semi-arid Lands for displacement impact projects on August 23 and the August 28 spending of Sh2.2 billion by the State Department for Crop Development for procurement of drying and storage facilities for post-harvest loss management.

On July 28, Treasury also approved Sh400 million more spending to purchase vehicles at State House. The expense was not submitted to her office, Dr Nyakang’o revealed.

She is now calling for the hiving out of the Ministry of Finance from Treasury to have latter left with the role of catering for both national and county governments, while the former is dedicated to affairs of the national government.

“There is need to have a clear segregation of functions between these two entities,” Dr Nyakang’o told the lawmakers.

The conflict arises on the back of another row in the last financial year, when the CoB locked horns with Treasury over the Sh6.1 billion paid out to London-based private equity fund, Helios Investment Partners, following their exit from Telkom Kenya.