New card system to reduce public funds wastage in allowances and fuel payments

Public Service, Youth and Gender Affairs CS Margaret Kobia.
From July, the government will introduce a raft of austerity measures to reduce spending by the public service as it seeks to cut down on costs and enhance optimum production.

The new measures range from mandatory pension deductions, electronic devices and systems to limit spending by State employees during trips, performance-based system and changed promotional criteria.

While reading the 2019/20 budget, National Treasury Cabinet Secretary Henry Rotich said there are plans to implement an electronic system to limit spending by State employees during trips. Rotich said the Government will be experimenting with a card system in allowances payment to its workers, which would make it easy to account for what one spends while on a local or foreign working trip.

“Expenditure on domestic and foreign travel has been growing due to frequent travels. To limit this expenditure, we are exploring the use of a more efficient cost cutting approach, including use of electronic cards system for all public officers traveling within and outside the country. This card would be pre-loaded with subsistence allowance to be expended by officers traveling on official duty on eligible expenditures only,” he said.

The move would easily save billions of shillings in public funds lost through falsifications of documents as the officers struggle to account for the cash they have been given.  Some officers have been known to claim allowances for trips they never undertook. Others even claim money for more than one trip taken at the same time and ended pocketing money for non existence causes.

Controller of Budget Agnes Odhiambo said in her 2018 report that civil servants spent Sh12 billion in travel.

Parliamentarians incurred the largest amount by spending about Sh2 billion on domestic travel, accounting for 23 per cent of all monies spent on traveling locally.

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The expenditure was lower than the previous year, where State officials spent Sh15.6 billion in travel.

“Domestic and foreign travel was the third highest recurrent spending category,” said the report. The categories that accounted for the highest government spending last year were salaries to all civil servants followed by transfers to semi-autonomous government agencies.

“The highest expenditure category was personnel emoluments at Sh377.7 billion, representing 39.3 per cent of the gross recurrent expenditure,” read the report.

“The second highest recurrent expenditure category by government ministries, departments and agencies in 2017/18 was current transfers at Sh346.4 billion, representing 36 per cent of the gross recurrent expenditure.”

Last week, Public Service Chairman Samwel Kirogo said civil servants will be required to make mandatory contributions, constituting of 7.5 per cent for their pension from the beginning of the 2019/20 financial year which starts in July.

This would cure the ballooning pension bill that is threatening to surpass the amount paid in wages.

Another measure Rotich suggested is the control of spending on transport through use of fuel cards.

“The Cabinet is considering a new government transport policy that will standardise the institutional framework for fleet management and use of fuel cards to improve efficiency and cut cost,” he said.

[Jacob Ng’etich and Amos Kareithi and Stanley Ongwae]

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Austerity MeasuresPublic FundsTaxesCivil Servants