The amount of money that government ministries and agencies (MDAs) have spent without the approval of MPs has shot up 134 times over the last eight years as agencies find ways to bypass scrutiny on suspect expenditure.
A new audit report by Auditor-General Nancy Gatungu shows that government ministries, departments, and agencies (MDAs) spent Sh147.39 billion in the financial year 2022/23 without authorisation by Parliament.
This is 134 times more than just Sh1.1 billion that was spent without going through the normal budget-making process in FY2014/15, a worrying trend that the Auditor-General links to deliberate efforts by officials to avoid public scrutiny.
Article 223 of the Constitution allows the government to withdraw money from the Consolidated Fund Services (CFS) without the approval of MPs but to a maximum of 10 percent of the approved budget of that financial year.
The spending is also limited to emergencies for which no money had been allocated in the normal budget-making process, and approval of Parliament is also required within two months after the money was first withdrawn.
Ms Gathungu, however, says this loophole is being misused by government entities to withdraw money from the CFS without public participation.
The lack of guidelines to inform the emergency spending has also enabled the constitutional provision to be misused, especially in recent years where unapproved withdrawals have hit a record high.
“Due to a lack of guidelines, MDAs have been requesting for additional funding for items that could have been factored during the normal budget process. This is attributed to poor budget planning by MDAs,” said Ms Gathungu.
As a result, the amount of withdrawals under Article 223 of the Constitution has increased from Sh1.1 billion in the financial year 2014/15 to Sh147.39 billion in the financial year 2022/23, representing a percentage increase of 13,299 percent.”
The Auditor-General also noted that despite the Contingencies Fund being allowed to hold as much as Sh10 billion to cater to emergency spending, the government deliberately avoids using it due to the stringent conditions attached to it by the Public Finance Management Act 2012.
They, therefore, prefer to make funding requests under Article 223 (1) (a) of the Constitution and not Article 223 (1) (b) of the Constitution, said Ms Gathungu.
The Contingencies Fund had a balance of Sh7 billion as of June 30, 2023, and there were no withdrawals from the kitty for the financial years 2015/2016, 2018/2019, 2019/2020, and 2020/2021.
“Further, requests from the Contingencies Fund have remained low over the years; ranging from zero requests to a maximum of Sh3.1 billion per financial year,” said Ms Gathungu.
Some of the expenditures that were not approved by Parliament during the last days of former President Uhuru Kenyatta include billions of shillings spent on fuel and maize subsidies in the financial year 2021/22.
But perhaps none was as controversial as the Sh6.09 billion buyback of Telkom Kenya from private equity firm Helios Investment Partners which culminated in an inquiry by Parliament.
In October, the Cabinet cancelled the controversial buyback of the financially struggling telco, which has been making losses over the years.
