Treasury on the spot over ‘idle’ Covid-19 cash

Auditor-General Nancy Gathungu

Auditor-General Nancy Gathungu who has faulted the National Treasury for failing to utilise Sh9.7 billion that was collected from the public to deal with the effects of the Covid-19 pandemic.

Photo credit: File | Nation Media Group

Auditor-General Nancy Gathungu has faulted the National Treasury for failing to utilise Sh9.7 billion that was collected from the public to deal with the effects of the Covid-19 pandemic.

The latest revelations on the failure by the National Treasury to spend the Covid-19 cash are contained in the Auditor-General’s report on the accounts of the Treasury for the 2020/21 financial year submitted to Parliament.

The audit report notes that although the fund has been in existence since the pandemic was first reported in the country on March 13, 2020, no expenditure of the accumulated funds has been incurred since inception.

This is notwithstanding the fact that the fund was created to alleviate the effects of the pandemic at a time the country’s resources had been overstretched.

“In the circumstances, the fund did not achieve its objective of alleviating the effects of the Covid-19 pandemic as envisaged,” the report states.

“The funds did not realise value for money as the resources remain held idle while the citizens suffer from the scourge.”

A special audit report by the Auditor-General on the utilisation of Covid-19 funds by the national government entities for the period March 13, 2020 to July 31, 2020 shows that the National Treasury Cabinet Secretary established the Covid-19 Emergency Response Fund.

Unspent money

Although the report had Sh9.7 billion as the unspent money as at June 30, 2021, the special audit shows that the four bank accounts operated by the National Treasury had closing balances of Sh9.86 billion as at July 31, 2020.

The four bank accounts opened by the National Treasury in relation to the Covid-19 emergency response fund had National Treasury Principal Secretary Dr Julius Muia as the sole signatory.

They include three separate accounts opened at the Central Bank of Kenya that had Sh288.75 million being donations from well-wishers, Sh9.39 billion that included donations from the country’s investigative and prosecution agencies and Sh179.21 million in voluntary pay cuts from various state officers including the president, his deputy and cabinet secretaries.

The fourth account was opened at the National Bank of Kenya and had Sh6.3 million.

It is curious that the amount remains unutilised as the government went ahead to procure loans from development partners to help address the effects of the pandemic.

No properly constituted board

However, the Auditor-General has faulted the continued existence of the kitty without a properly constituted board to manage the fund as required by the PFM (Covid-19 Emergency Response Fund) Regulations 2020.

“The management indicated that there exists a similar fund under the Office of the President, with a fully constituted board and whose roles and mandate are similar to the fund being run by the National Treasury,” says the report.

However, the auditor notes that there is no evidence that the existing board was appointed within the provisions of the PFM (Covid-19 Emergency Response Fund) Regulations of 2020.

The special audit also established that besides the four bank accounts, there is another Bank Account — Kenya Covid -19 fund account number operated under Absa Bank Kenya PLC.

The account number was opened by the Covid-19 Emergency Fund Board that was established by President Uhuru Kenyatta.

Donors’ financial support

The national government, through the National Treasury, negotiated with various donors for financial support for both Covid-19 mitigation programmes and budgetary support-economic stimulus programmes.

For the period of the special audit, Sh214.91 billion was mobilised from various development partners in the form of loans and disbursed to various government agencies for Covid-19 emergency response interventions.

When the Covid-19 pandemic was declared, the Covid-19 intervention measures saw budgetary reallocations amounting to Sh58.16 billion, to cater for the emergency response.


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