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Ex-Treasury CS Ukur Yatani coerced me into approving billions, says Controller of Budget Margaret Nyakang'o

Dr Margaret Nyakang'o, the Controller of Budget, before the National Assembly Parliamentary Committee on Finance.  [Elvis Ogina, Standard]

A senior state official on Tuesday, March 7, 2023, claimed she was coerced into authorizing payment of billions of shillings on the sunset days of former President Uhuru Kenyatta's term.

Dr Margaret Nyakang'o, the Controller of Budget, shared with the National Assembly Parliamentary Committee on Finance conversations with the former National Treasury Cabinet Secretary Ukur Yatani coercing her into making approvals.

Except for the means, the shock revelation came close to lending credence to Deputy President Rigathi Gachagua public statements that billions of shillings moved fast at the time. Gachagua had claimed the money was spirited out of the city in helicopters.

Nyakang'o admitted she gave in to pressure and threats. In the messages tabled, Yatani is captured repeatedly begging her to facilitate approvals for a number of payments for different accounts while also dropping names.

"From where i sit i have to use alot of discretion. And I am also a human being. When I am under threat, I also have to self-preserve," she told the committee.

In one request for approval of Sh1 billion "security related payment", Yatanni claimed the contractor was threatening to abandon site due to non payment. 

"You need to approve this for us immediately. These projects are security related and contractor is abandoning site due to non payment. There is extreme urgency and I may ask boss to call you if need be," says one of the chat sent on January 4, last year, at 7.31pm. 

On April 13 last year, the former CS made another request seeking approvals worth billions for the fuel subsidy: "Please help us urgently clear this to enable us deal with the challenges of petroleum."

But is on the 04/08/2022, four days to the election at 2:13 pm that the former CS was frantic. He needed a number of approvals:

"Good Afternoon, please also facilitate similar approvals for infrastructure ministry for amounts of Ksh8B and kshs2B. An hour later, a more distraught Yattani asks Dr Nyakang'o to "Please help us expedite this" and added; "HE might even call you if we don't deal with this by 4pm."

At this point, Nyakang'o attempts to put up a fight, albeit feebly: "Are you saying we have 26 minutes to complete the process?" The unrelenting ex-CS insisted, again, dropped the big name.

"He's just called and I assured him that I have spoken to you and you promised before the end of the day. I know he'll call again. He persuaded some guys to resume work and promised that their bill be settled by today."

Nyakang'o attempted to move it to the following day but the CS would have none of it: "You need to devise how to deal with it. I am sorry but try."

The dramatic revelations in the probe follows a petition by COFEK  secretary general Stephen Mutoro who had claimed that credible information point to Sh55 billion having been spent in the last days of the Jubilee administration without approval of the National Assembly.

Former National Treasury Cabinet Secretary Ukur Yattani. [Wilberforce Okwiri, Standard]

According to the National Government Budget Implementation Review Report released last month by the Office of the Controller of Budget, the Consolidated Fund received Sh1.43 trillion in receipts in the first half of the 2022/2023 Financial year.

This represented 40 per cent of the annual target of Sh3.54 trillion and one per cent higher than Sh1.42 trillion received in the first half of the 2021/2022 financial year.

"The total expenditure by the National Government amounted to Sh1.43 billion, representing 38.9 per cent of the gross estimates, a decrease compared to 39.5 per cent recorded in the first six months of the 2021/2022 financial year," explained the Controller of Budget in her report.

The Controller of Budget further highlighted that the government approved Sh69.45 billion in additional funding in the first half of the 2022/2023 financial year, including Sh6 billion for the controversial purchase of Telkom Kenya.

Other additional charges drawn from the exchequer in the last half of last year include Sh9.4 billion by the State Department for Infrastructure, Sh4 billion by the State Department for Crop Development and Agricultural Research and Sh16.5 billion by the Ministry of Petroleum under the fuel subsidy programme.  

"The cumulative exchequer issues under Article 223 amounted to Sh69.45 billion and is below 2 per cent of the 2022/2023 budget sum appropriated by Parliament," said the Controller of Budget.

"Nonetheless, the CoB recommends that these releases be regularised by Parliament as stipulated in Article 223(2) of the Constitution, which state that “The consent of Parliament for any spending under this Article shall be sought within two months after the first withdrawal of the money, subject to clause (3).”

Last week Parliament's Budget and Appropriations Committee rejected two payments; the Sh6 billion Telkom Kenya payout and Sh4 billion for the maize flour subsidy and recommended a review of Article 223.

"The payment of Sh6 billion for the exit of Helios Investment from the shareholding of Telkom Kenya ltd be rejected as per the recommendation of the Departmental Committee on Finance and National Planning," stated the committee in its report.

The Committee further recommended that the Office of the Auditor General conduct an audit on expenditures granted under Article 223 in the 2022/2023 financial year by June this year.       

At the same time the Controller of Budget raised issue with an extended closure of the Integrated Financial Management System, IFMIS, which cut access to billions in development expenditure to MDAs during the crucial political transition period.

Auditor-General Nancy Gathungu. [Mose Sammy, Standard]

To limit MDAs from further spending, the IFMIS was ‘locked’, pending approval of the first supplementary budget," she states. "As such, there was no access to IFMIS, negatively affecting MDA’s budget implementation, especially procurement of goods and services."

Mutoro in his petition noted that the inappropriate and illegal (mis)use of the said Sh55 billion is a pointer to weak mechanisms of transparency and accountability in the run-up to transition from one Government to the other and amounted to blatant corruption.

"The Kenyan taxpayer cannot be put in a situation where s/he must finance an expensive election and an opaque transition where colossal sums of money are lost. Again, this cannot be a precedent that must be set. Tracking and recovery of the said funds, ought to be made a priority and those who broke the law brought to swift justice," the petition read.

He called for mechanisms to avert similar incidents from occurring in future must be put in place. This would be the least that is needed to inspire confidence among Kenyans to pay tax. 

Mutoro prayed that Parliament orders the Auditor General to conduct a special forensic audit, within two weeks, on all public expenditures July to September, 2022 and specifically the expenditure that was never voted for by Parliament but was still allocated and spent by Ministries and other Government Agencies 

Others Mutoro sought to be probed were Controller of Budget, the accounting officers of all beneficiary allottees and any other relevant officers as well as interested members of the public and professional organizations to give their input. 

He also requested parliament to amends the relevant laws to bar outgoing administrations from spending any such public funds not voted by the National Assembly and by dint of the same introduce heavy penalties including life in prison for those found culpable on such economic crimes that amount to treason and economic terrorism. 

On Sunday, Gachagua accused the previous regime, for allegedly stealing Sh24 billion in their sunset days and threatened to expose the individuals involved in a few days. He spoke while attending a church service at Winners Chapel in Roysambu.

“In the next few days, I will make public the names of individuals who stole public money before leaving office in the previous regime. They stole Sh24b before they left office,” Gachagua says.