Auditor-General Nancy Gathungu has questioned the disbursement of some Sh5.03 billion to various ministries from the Contingencies Fund for expenditure that was non-urgent, unnecessary, and in some cases payment for events that had long passed.
In the latest report for the financial year ended June 2024, the Auditor-General has flagged a Sh3.8 billion expenditure return from the State Department for arid and semi-arid lands (ASALs) that was irregularly disbursed from the fund.
Ms Gathungu says the Sh3.8 billion was disbursed six months before the payment was made in June.
“Review of the expenditure returns provided revealed that the funds were disbursed from December 2023 to June 2024 and expenditure was paid out from the funds until June 14, 2024,” Ms Gathungu said in reference to the disbursements to the ASALs Department.
“No explanation was provided to justify the funding of the expenditure from the fund yet the State Department had included the activities in the approved supplementary budget… In the circumstances, the propriety of the expenditure could not be confirmed.”
In the statement of receipts and payments reviewed, there was Sh30 million disbursed to the State Department for Public works, Sh65 million to the State Department for Crop Development, and Sh35 million to the State Department for Livestock, all totalling Sh130 million for expenses that the Auditor General says did not meet the urgency for a drawdown from the Contingency Fund.
“Review of the respective expenditure returns revealed that it was in respect of goods and services that could not meet the threshold prescribed in the Public Finance Management Act, 2012… that the advances may be made from the Fund if the Cabinet Secretary is satisfied that an urgent and unforeseen need for expenditure has arisen for which there is no specific legislative authority,” Ms Gathungu said.
The Contingencies Fund is created by Article 208 of the Constitution and covers urgent and unforeseen expenditures.
The Fund—which draws from the Consolidated Fund--provides for advances if the National Treasury Cabinet Secretary is satisfied that there is an urgent and unforeseen need for expenditure for which there is no other authority.
Ms Gathungu is questioning the Treasury Cabinet Secretary’s judgment on the advancement of the funding with no sufficient evidence of urgency to purchase the goods and services in the flagged ministries.
She adds that the expenditure returns from the Ministry of Defence for Sh500 million, the State Department for Internal Security and National Administration (Sh500 million), and the State Department for Irrigation-(Sh70 million) totalling Sh1.07 billion were not provided for audit.
“In the circumstances, the validity of the amount disbursed from the Fund of Sh1,070,000,000 could not be confirmed,” added Ms Gathungu.
The statement of receipts and payments reflects payments from the Fund - advances to Ministries, Departments, and Agencies (MDAs) of Sh6,529,762,811 to cater for various urgent and unforeseen requirements.
