MPs plot to cut Treasury's use of funds to reduce expense abuse

Treasury Building ahead of the reading of the budget at Parliament on April 7, 2022. [Denish Ochieng, Standard]

Members of Parliament are pushing to have the National Treasury seek approval before withdrawing funds from the Consolidated Fund, the government’s account for expenditure.

Public Accounts Committee chairman John Mbadi has tabled the Public Finance Management (Amendment) Bill 2023 that seeks to amend the Public Finance Management Act to ensure the National Assembly gives nod for expenditure of funds to curb what some lawmakers term abuse of Article 223 of the Constitution by the Executive.

“The National Treasury shall seek pre-approval to incur expenditure from the relevant committee of the National Assembly. The relevant committee of the National Assembly shall consider the pre-approval request under subsection (1) within fourteen days and submit its recommendation to the Treasury,” the Bill states.

According to Article 223 of the Constitution, the national government is allowed to spend money not appropriated if the amount appropriated for any purpose under the Appropriation Act is insufficient or a need has arisen for expenditure for a purpose for which no amount has been appropriated by that Act; or the money has been withdrawn from the Contingencies Fund.

It, however, also provides that the approval of Parliament shall be sought within two months after the first withdrawal of the money.

The Bill seeks to tighten the noose on unapproved expenditure by the Executive and streamline the procedure for incurring “urgent or unforeseen expenditure pursuant to Article 223 of the Constitution.”

“After the National Assembly has approved spending under subsection (3) an Appropriation Bill shall be introduced for the appropriation of the money spent. The supplementary budget shall include a statement showing how the additional expenditure relates to the fiscal responsibility principles and financial objectives,” said Mbadi.

The introduction of the Bill comes against the backdrop of revelations that the Treasury on August 5 paid Sh6.1 billion for a 60 per cent stake in Telkom Kenya without seeking approval by Parliament. The transaction saw the government assume whole ownership of Telkom Kenya.

The deal has now been subject to controversy with queries as to why the Treasury had to invoke constitutional clauses that allow it to spend money under certain circumstances without approval by Parliament but require it to seek the same later through a supplementary budget.

Compounding the woes of Treasury was revelation that Helios Investment Partners was willing to take the Sh6.1 billion in tranches even as the Treasury rushed to make a one-off payment.

Parliament is now probing the matter that has also seen current and former senior government officials including the Controller of Budget and former Treasury Cabinet Secretary Ukur Yatani butt heads.

It also follows the commencement of a special audit by the Auditor General into the expenditure of the Jubilee administration in its last days where it spent Sh4 billion on a maize flour subsidy programme.