Treasury CS Ukur Yatani when he appeared before Mediation Committee on the County Governments Grants Bill at Parliament, Nairobi on March 22, 2022 [David Njaaga, Standard]
Lawmakers now say they smell a rat in the decision by the National Treasury to approve an additional allocation of Sh3.7 billion for the emergency kitty.
In a report by the National Assembly’s Budget and Appropriations Committee (BAC) on the first Supplementary Budget estimates, the legislators wondered why the money had not been spent yet it was emergency cash.
"The management of the Contingencies Fund is in question. The committee observed that the fund has been allocated Sh3.7 billion in the Supplementary Budget yet no amounts have been withdrawn and spent from the Fund,” read part of BAC’s report.
The Constitution allows the National Treasury to allocate funds to State corporations in case of emergency without seeking Parliament’s permission.
The committee, which is chaired by Kanini Kega, the MP for Kieni Constituency, explained that ideally such allocations during a supplementary budget is supposed to be a replacement of monies withdrawn from the fund.
“The purpose is to finance unforeseen and unpredictable expenditures which were not budgeted for but must be incurred in the public interest before a supplementary budget is approved.
"Since no money was withdrawn from the fund, the arbitrary increase in allocation to the fund is not procedural," the report says.
Treasury-granted approvals as allowed by the Constitution amounted to Sh75.4 billion; Sh40.4 billion being recurrent and Sh35 billion is development.
However, the committee noted, only Sh29.2 billion had been disbursed to spending agencies, in what it says indicates that the expenditure items were not emergency in nature and should therefore not have been approved.
Unforeseen expenditure
The committee also took issue with the fact that much of the increased allocation by the National Treasury in the spending plan was on operations and maintenance items as opposed to emergency and unforeseen expenditure.
“Ideally, a supplementary budget should constitute emergency and unforeseen expenditure," the report says.
"The practice of undertaking significant increases in O&M spending during the Supplementary Budget has the potential to be abused as there is usually no justification provided.”
Moreover, increased spending on Operations and Maintenance was likely to deny limited resources to development related spending, crippling economic growth.
Funds allocated in the emergency kitty were to be used for drought-related interventions.
Initially, Treasury had sought to supplement the budget by Sh126.3 billion which, in addition to being used in battling drought, would also be used to beef up security, fight Covid-19, pay pending bills and salary shortfall, fund 2022 elections and be used in the expansion of CBC infrastructure.
However, the National Treasury made further changes to the mini budget, with the government now expected to spend an additional Sh138.2 billion by the end of June this year. `
