MPs kick storm over unspent Sh12.4 billion meant for poor counties

Legislators have raised a storm in Parliament over Sh12.4 billion that has remained unspent for years despite being allocated to building hospitals and water projects in poorest counties.

An estimated 12 million Kenyans from the 14 marginalised counties were the intended beneficiaries of the cash that has been growing at the Central Bank since 2011.

Including the allocations for the current financial year, the fund has grown beyond Sh20 billion.

Members of the Committee on National Cohesion and Equal Opportunity yesterday still set to be extended.

Public funds must be spent within the financial year, meaning the projects cannot be completed in the current one which expires on June 30.

Maina Kamanda, the committee chairman, accused the National Treasury of diverting the money to other needs at the expense of the vulnerable population in the regions that have lagged behind in development.

“There is no goodwill from this man here in charge of government spending to release the funds because he would be hurting another arm,” Mr Kamanda said, referring to National Treasury Principal Secretary Kamau Thugge.

Equalisation Fund

He said the only beneficiaries in the allocations made to the Equalisation Fund were the technocrats who had spent Sh1.1 billion, mostly on planning and mapping of the intended projects.

Several other members of Kamanda’s committee, including Adan Keynan of Eldas, James Lomenen representing Turkana South, and Samburu’s Maison Leshomo, supported the sentiments.

Mr Keynan said he knew of two projects in his constituency that were developed through the fund, but stunned his colleagues when he said the contractors had not been paid despite completing the work more than a year ago.

His Turkana South counterpart said none of the projects listed as being at various stages of construction in his constituency existed.

Mr Lomenen’s claims, if confirmed as true, could point to potential fraud, as the supposed contractors could show up and claim payments for completing non-existent projects.

Mr Thugge blamed the lengthy procurement procedures for the delays, saying the financial year had in all the periods ended before the projects could be funded, and ensuring that the cash remained in the bank.

“We have done everything to ensure the projects are implemented, but no spending can be done after the Appropriations Act has expired and this is June 30,” he told the MPs.

It is Government policy for all budgeted expenditure to be completed within the period it was planned for, he said.

The Controller of Budget cannot approve any cash withdrawals after June 30 regardless of whether the National Assembly would have previously allowed it.

Such revenues are rolled over to the following year and subjected to a fresh round of budgeting.

Among the proposals made by Mr Thuge in tackling the budgeting problems is an amendment presented by the National Treasury that is seeking to exempt the Equalisation Fund from the strict spending timelines.

Should the amendment be allowed, then the Equalisation Fund Board will seek only one approval from the National Assembly during budgeting for spending on development projects even if the procurement and construction spill beyond one financial year.

Commission for Revenue Allocation determines the level of marginalisation of a said country before making proposals on the requisite budgets that would be directed at remedying the disadvantage.

The Equalisation Fund Board, where Thugge, being the National Treasury PS, sits, determines the projects to be undertaken but in consultation with the county leaderships.

The Kamanda’s committee promised to help in pushing the legal amendment sought by the PS.