Uhuru in a spot over withdrawal of Sh368b to finance State operations

By Peter Opiyo and David Ochami

Finance Minister Uhuru Kenyatta is again target of criticism, this time over Government’s withdrawal of Sh368 billion to run its operations when the new Financial Year begins this Friday.

Parliamentary Budget Committee, during its public hearing on the 2011/2012 Budget, was inundated with concerns on how the House endorsed a Motion seeking withdrawal from the Fund without due regard to the Constitution.

Over a week ago, Parliament endorsed the withdrawal of Sh368 billion from the Consolidated Fund, representing one-half of the total net estimates of Recurrent and Development expenditure without approving Appropriation Bill as required by the Constitution.

Articles 221 and 222 of the Constitution require that Parliament endorse Appropriation Bill before it can approve any withdrawal from the Consolidated Fund, but Parliament ignored this and approved the withdrawal.

In their presentations to the Budget Committee, Mars Group and National Tax payers Association raised queries with the procedure and called for ‘reversal’ of the move.

Transition period

In his memo to the Budget Committee, Mars Group Chairman Mwalimu Mati said the move was unconstitutional and called on the committee to intervene and ensure Supreme law was followed to the letter.

"What Parliament cannot do, and would violate the Constitution, is to authorise any withdrawal of funds from the Consolidated Fund before an Appropriation Bill is introduced in Parliament and passed into law as an Appropriation Act," argued Mati.

"The Constitution at Article 222 merely provides for the withdrawal if the President has not assented to the Appropriation Act or is unlikely to assent to the Act," he went on.

Subukia MP Nelson Gaichuhie, who is a member of the budget committee, said the move has been a matter of grave concern to the committee, but pointed out that the team is likely to let Treasury off the hook given the country is in a transition period.

"It was a serious concern within the committee and we alerted Treasury but they said they would try to make amends. We had a mutual agreement that during the transition period many hiccups may arise," revealed the Subukia MP.

Articles 221 and 222 require that once the expenditure estimates of the National Government, Judiciary and National Assembly have been approved by Parliament, they shall be included in Appropriation Bill, which shall be introduced to the National Assembly to authorise withdrawal from the Consolidated Fund.

Manyatta MP Emilio Kathuri, who is also a member of the committee, acknowledged the problem, saying the committee had made it clear to the public during public hearings that indeed the Constitution was violated. "We must make it clear that it was unconstitutional but we have to start from somewhere and ensure that this problem does not occur again," said Kathuri.

Uhuru’s latest problems cap a pattern of errors and unfinished business between him and committees over his handling of the ministry and adherence to Public Audit, Fiscal Management and Constituency Development Acts.

Original estimates

Before Mati’s disclosures Uhuru had problems with Parliament when he tried to deviate from the roadmap presented by Speaker Kenneth Marende on June 7 by attempting to have the plenary debate the Financial Statements and other documents.

This bore risk of tying the hands of the budget committee and public views on the minister’s June 8 proposals if Parliament rejected his Motion or approved it.

Pending issues include arrears under CDF and reported Sh10 billion error row in the supplementary estimates of the 2008-2009 financial year. Uhuru has not created a bipartisan team to address perennial issues on CDF calculations, according to CDF Committee chairman Ekwe Ethuro.

Meanwhile, the minister has been accused of frequently publishing the Budget Policy Statement late or not declaring quarterly revenues in fulfilment of Fiscal Management Act.

Following a resolution of Parliament after the error the minister and Parliament’s Budget and Finance committees were to appoint an independent auditor to determine how original estimates in the substantive budget changed at the supplementary budget.

The audit was never reported to Parliament, according to Gwasi MP John Mbadi, who sits on the Budget Committee and has also raised the unanswered question in Parliament in April about unaudited revenue accounts for the 2007-2008 Financial Year, as well as reports that during the fiscal year there was a conflict of revenues declared by the Minister and Auditor General.

When the Auditor General audited the 2007-2008 Financial Year and issued a certificate in June 2009 he found that Treasury collected Sh516 billion while the minister said total revenue of Sh410 was netted for the same period.

In May Finance Assistant minister Oburu Odinga attempted to evade Mbadi’s question by telling Parliament that the Sh106 billion discrepancy was under probe by the Public Accounts Committee.

But it turned out the committee had already published a report on the contentious Financial Year, only mentioning the matter shallowly.

Uhuru moved the Motion for Parliament to approve the withdrawal from the Consolidated Fund of Sh368,316,172,938.50 to avoid a shut down of Government at the end of the current financial year 2009/2010 on June 30.