MPs move Sh1bn emergency funds from ministry’s control

Members of Parliament have moved the Sh1 billion that the Treasury had initially allocated Cabinet Secretary Anne Waiguru’s office to cater for emergencies.

The money was moved after the Parliamentary Budget Office (PBO) told the National Assembly’s Budget and Appropriation Committee that it amounted to a double allocation for the same purpose, which is illegal.

The double allocation signal arose from the fact that the Treasury had set aside Sh4 billion for emergencies (technically referred to as civil contingency reserves), making the Ministry of Devolution request for emergency funds a double allocation.

“(The Budget and Appropriation Committee proposes) to re-allocate Sh1 billion under the State Department for Devolution from civil contingency reserves to resettlement of IDPs,” the committee in a report presented in the House last week.

The committee said that the no “outputs” (or what was expected to be achieved with the money) had been indicated when the money was initially earmarked for emergencies.

Allocation of the money to resettlement of the IDPs, however, means that the Devolution ministry has retained control of the money, but a specific purpose with clear outcomes.

“Allocation of funds for a similar function in two separate spending agencies raises concern of duplication of functions,” the committee in its report.

Jason Lakin, the country director of International Budget Partnership, said funds for civil contingency reserves was specific to the Treasury and was not expected to be duplicated in another department or ministry.

“The allocation of civil contingency reserves is a function of the Treasury so you would not expect to see the same duplicated in another ministry,” said Dr Lakin even as he cautioned MPs to exercise their power to re-allocate funds in the Budget with caution because its consequences were often negative.

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He, however, reckoned that whereas the National Assembly has been more measured in its re-allocation of the budget items, the same could not be said of county assemblies.

“The National Assembly has been more controlled in terms of re-allocations but some county assemblies have gone overboard. The power to the assemblies to have a final say on budgeting was given by the Constitution because the Executive had abused its powers,” said Dr Lakin, adding that the county assemblies risked falling in the same trap.

Dr Lakin said it was still early days to rethink changing the law or the Constitution giving Parliament the final say over budgets, noting that an informed public that participates in budget-making would ensure national and county assemblies remain reasonable.

The Treasury had before finalising the 2015-16 Budget Estimates received Parliament’s feedback on the Budget Policy Statement (BPS), which sets priorities and ceilings for the various sectors and get parliamentary approval in March.

Parliamentary reckons that though the Treasury had adhered to many its recommendations there was still discomfort in the fact that it had introduced its own changes to the document.

Notable changes that MPs said had not been explained include increments to the Ministry of Defence’s recurrent vote as well as increments to the development votes of the State Department of Planning, State Department of Environment, State Department of Livestock and State Department of Fisheries.

Under the Constitution, Parliament has the final say on the budget and can re-allocate items within the programmes and ceilings set out and approved in the BPS.

The MPs also have the powers to move any item within the Budget Estimates except the deficit (to ensure it does not burden the country with borrowing).

The committee moved Sh1.6 billion under the Ministry of Labour’s capital expenditure for social assistance to vulnerable groups and re-allocated it to Child Welfare Society for cash transfers to abandoned children in rescue centres, children’s homes, street children and child-headed homes.

Textile manufacturing company RIVATEX received Sh500 million that was taken from the Export Processing Zones Authority (EPZA) under the Ministry of Industrialisation and Enterprise Development.

The MPs also re-allocated Sh600 million initially meant for Uwezo Fund — under the State Department for Planning — to Youth Enterprise Fund, Women Enterprise Fund and Anti-FGM Board.

Tourism recovery which had been allocated Sh6 billion took a cut after the Budget and Appropriations Committee re-allocated Sh500 million of money to the construction of Mombasa-based Ronald Ngala Utalii College.

The committee further moved Sh1.9 billion from the Ministry of Health and gave Sh1.1 billion of it to the leasing of healthcare equipment while the remaining Sh800 million went to upgrading of slum healthcare services.

Allotment of Sh1 billion for human resource reforms under the National Treasury was also cut. A similar amount was also cut from the recurrent allocation for the contributory pension scheme for civil servants.