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How mini budgets have become looting avenues

COUNTIES
By Standard Team | October 31st 2016
Chaiman of the Budget committee Mutava Musyimi(left)Finance cabinet secretary Henry Rotich(center) Devolution cabinet secretary Mwangi Kiunjuri and Principal secretary of treasury Kamau Thuge during the reading of 2016 Budget at parliament on 8/6/16-BEVERLYNE MUSILI

Concern is growing that supplementary budgets have become new avenues for looting of public resources.

The mini budgets, essentially requests Parliament for additional spending of public funds after the budget has been passed — sanctioning withdrawal of billions of shillings just days to the end of the financial year.

For instance, the Supplementary Appropriation Bill (No 2) (National Assembly Bill No 34 of 2015) was passed on June 25, last year, five days to the end of the financial year.

It was the second supplementary budget that proposed to increase the 2014-2015 budget by Sh193.8 billion—Sh180.9 billion of it as additional capital expenditures, raising questions how procurement processes can be complied with in five days.

NYS SCANDAL

Part of the additional development expenditure budget was Sh5.8 billion for the State Department for planning that included Sh4.9 billion for National Youth Service. It is this money that ended up being looted under the NYS scandal.

In one of the suspect transactions in the latest Ministry of Health scam, there are double entries under line item ‘non-residential buildings (offices, schools, hospitals, etc) whose only distinction is a variation of one number in the codes, apparently to allow processing through the Integrated Financial Management Information System (IFMIS).

Under the first entry, the supplementary estimates total Sh350 million which was spent on non-residential buildings, raising questions how this could be classified as an unforeseen expenditure.

In the other Sh800 million, which was budgeted for the same non-residential buildings, the government was left with a debt of Sh413 million again raising questions why officials had over-committed without available funds.

Analysts warn it is this kind of additional expenditure — there is no evidence it is money put to good use — that is escalating the domestic debt.

A supplementary budget is not entirely improper, it is necessary to sanction withdrawals from contingency fund to fund emergency expenditures such as disasters and also allow re-allocations to transfer allocations to other priority areas but it appears the tools is now facilitating looting.

SCANTY INFORMATION

Earlier, the first supplementary budget approved by the National Assembly on June 3 2015 had increased the 2014-2015 budget by Sh50.5 billion.

The parliamentary budget office had acknowledged that the second supplementary estimates were prone to abuse because of scanty information.

“Overall, the Supplementary II estimates is lacking in substantial detail which limits oversight. In future, the Treasury should attach a memorandum to the supplementary estimates to provide further details on the proposed changes in the budget including why the changes were necessary,” stated a report titled ‘Unpacking of the Second Supplementary estimates for 2014-2015’, dated June 2015.

The parliamentary budget office questioned the wisdom of approving Sh193.8 billion five days to the end of the financial year.

It also warned the Government’s decision to prepare two different supplementary estimates within the same year could be a scheme to beat constitutional limits.

It is under Jubilee government that the supplementary estimates are being prepared twice, the second too close to the end of the financial year. Article 223(5) of the Constitution limits supplementary appropriation to not more than 10 per cent of approved budget for that year.

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