About Sh451 billion that ministries, departments and agencies (MDAs) expect to receive will not undergo rigorous scrutiny.
The money will be dished out as loans and grants or received from various fees and licences.
According to the Controller of Budget, the fact that appropriation-in-aid (AIA), or money generated or received by MDAs, is ordinarily not captured by the Integrated Financial Management System (IFMIS), means it risks being misused.
In the financial year 2015-2016, the Treasury estimates that ministries will receive AIA totaling Sh388 billion for development expenditure and Sh63 billion for recurrent expenditure. “IFMIS adequately captures transfers to the MDAs and expenditure. However, it does not capture AIA generated by MDAs. Therefore, financial reports generated from the system are incomplete,” said the Controller of Budget Agnes Odhiambo in her half-year review report.
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AIA is income that a government department is authorised to retain rather than surrender to the Consolidated Fund, the government’s main account. The income offsets related expenditure in the current financial year.
The money includes loans or grants given directly to ministries either in cash or kind. It also includes revenue from the sale of tender documents and boarded goods.
Ms Odhiambo notes that pursuant to the constitutional requirement that the Treasury designs and prescribes “an efficient financial management system for the national and county governments” to ensure “transparent financial management and standard financial reporting”, Treasury has since prescribed IFMIS.
IFMIS is an automated system that is used for public financial management. It interlinks planning, budgeting, expenditure management and control, accounting, audit and reporting.
The Government hopes that the system will serve as a silver bullet for the endemic problem of corruption, especially at the procurement stage in various ministries.