State agencies fail to spend budget billions as year closes

eKey government departments failed to spend the billions of shillings allocated to them in the national budget leaving the economy without the financing steam to power growth.

The Office of the Controller of Budget (OCoB) says billions of development budget funds are lying idle with the exchequer as the quantity and quality of public services declines and the pace of economic growth remains subdued for the second year in a row.

The budget execution report says state agencies had spent only one third of the development funds by the end of March pointing to the likelihood that less than half of the money will have been used by the close of the year.

READ: Ministries fail to spend billions in first half

The report, the second to be published by the Controller of Budget since the office was established late last year, says state agencies had nine months into the financial year spent only 66 per cent of recurrent expenditure funds, about 10 percentage points below the target pointing to the fact that the challenge of spending cuts across the entire government machinery.

Only Sh510.5 billion or 44 per cent of the total annual development and recurrent expenditure funds had been spent nine months into the financial year — against the target 75 per cent.

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Agnes Odhiambo, the Controller of Budget, says an acute shortage of human resources and lack of expenditure monitoring structures has left most government departments without the means to spend the budget billions with serious consequences on the pace of economic activity.

The Ethics and Anti-Corruption Commission (EACC) topped the list of government ministries and agencies that had spent the least amounts of the development money by the end of March.

The agency, which has been without top executives since the removal of lawyer PLO Lumumba late last year, had spent less than seven per cent of the money it was allocated for development – pointing to the planning and approvals paralysis arising from the absence of the top managers.

Other poor spenders were the Cabinet Office, and three ministries including East African Community, Labour as well as the Justice and Constitutional Affairs.

These agencies had used less than eight per cent of the funds at their disposal only three months to the close of the financial year in June.

The ministry of local government topped the list of departments that lacked the capacity to utilise recurrent expenditure funds – followed by the Ministry of Planning and the Public Service Commission.

Mrs Odhiambo says understaffing and slow recruitment processes in the public service have weakened the capacity of most ministries and state agencies to spend recurrent budget funds – pressing the case for employment of a large number of civil servants in the next financial year.

That Kenya, a country where the rate of unemployment is estimated at 40 per cent of the adult population, is suffering acute staffing crisis in key government departments speaks volumes of the efficiency of the public service commission – the body that is charged with the hiring of public servants.