The Controller of Budget Margaret Nyakang’o has accused the Executive of using supplementary budgets to sneak in illegal expenditure, which leads to loss of public funds.
Dr Nyakang’o said this was achieved through invocation of Article 223 of the Constitution and use of the supplementary budgets to reallocate funds to items rejected during the budget-making process.
“The Budget implementation process is undermined by supplementary budgets which come in soon after the official budget. This continues to disorganise our process as the office of the Controller of Budget,” she said.
“The frequent changes are mostly illegal and irregular. Most agencies allocate money to one item and later distribute the funds to other projects that are not approved,” she added.
Nyakang’o called on Parliament to seal loopholes and ring-fence the Budget making process to prevent the loss of public funds.
At the same time, the Office of the Controller of Budget raised the red flag over surging pending bills currently standing at Sh159.7 billion across the 47 counties saying they are stifling development.
According to the national and county governments’ budget implementation review report for the third-quarter of the 2022/2023 financial year, the unpaid bills were leading to a decline in economic growth and an increase in poverty.
The report released last week shows of the Sh159.7 billion in pending bills, Sh29,333,516,172 was unpaid to contractors and suppliers under development expenditure while Sh20,930,947,745 was on recurrent expenditure.
Some counties with high pending bills include Nairobi at Sh102.8 billion, Wajir Sh5.3 billion, Mombasa Sh4.9 billion, Kiambu Sh5.3 billion, Machakos Sh2.88 billion, Muranga Sh2,66 billion, Kilifi Sh2.18 billion, Mandera Sh2.1 billion, Kajiado Sh2.06 billion, Tana River Sh2 billion and Embu at Sh1,554,208,477.
Counties with the least pending bills are Lamu at Sh29.7 million, Nyamira Sh90.2 million, Kakamega Sh134.3 million, Nyeri Sh138.7 million, Uasin Gishu Sh264.5 million, and Kirinyaga Sh391.4 million.
The controller of Budget attributed the delay in payment of pending bills owed to contractors and suppliers to the delay by the exchequer to release funds to counties. She was further concerned that even after the funds were released, counties diverted them depending on their pressing needs.
“There have been petitions by contractors that the pending bills be deducted from source before being transmitted to counties so as to cure the issue of the pending bills. Unfortunately, we work within the law and legislatively there is no law that allows for direct payment. If the law is changed, however, there has to be an inter-governmental engagement to achieve this,” she said.
Nyakang’o explained that the increase in pending bills had a direct implication on the development of budget implementation reports across the counties.