Economy

A third of State Corporation budgets spent on 'funds management'

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Controller of Budget Margaret Nyakango. FILE PHOTO | NMG

State corporations use a third of their budgetary allocation to manage funds, leaving little for development, the National Treasury said last week.

Mr Stanley Kamau, the acting Director-General of the Treasury’s Public Investments and Portfolio Management Directorate revealed that the 317 State corporations use about Sh330 billion of their Sh1 trillion budget allocation to manage the same funds.

Speaking at a breakfast gathering attended by stakeholders from various sectors, Mr Kamau accused state agencies’ boards of overstepping their mandate, “leading to plunder of resources.”

“State corporations and semi- autonomous government agencies alone consume over a third of their allocated funds to manage the funds,” he said, highlighting the dire state of management of public funds in the country.

“To stop this blatant theft of public resources we must prevent corruption from happening in the first place. While it is a political process, appointing board members should also be about getting experienced people with technical knowledge,” he added during the meeting held at Radisson Blu in Nairobi.

This, he said, partly explains why corporations currently have about Sh250 billion pending bills. Mr Kamau, further said that conflict between boards and management was a hindrance to effective governance.

Controller of Budget Dr Margaret Nyakangó while admitting that theft begins at the budgeting process, decried a lack of an Auditor- General, months after Mr Edward Ouko’s term expired.

“We are having a hard time because without the Auditor-General, there can be no accountability of whether money allocated in the budget is being spent in the intended manner,” said Ms Nyakang’o, who has been at the office for three months after replacing the Ms Agnes Odhiambo whose term ended last year.

She urged the public to take active role in the budgeting process, observing that Kenyans do not participate in overseeing how their money was being allocated.

Dr Ekuru Aukot, leader of Thirdway Alliance, however, said that corporate governance without change in political environment of patronage and theft would not cure the microeconomic and macroeconomic strife that the country finds itself in.

The event was organised by the Centre for Corporate Governance (CCG) Alumni Network, which is chaired by Winnie Ngumi, CEO of Space and Style.