Treasury on the spot over new budget

National Treasury Cabinet Secretary Ukur Yatani.PHOTO/ COURTESY

The National Treasury is once again on the spot for introducing new projects in the Supplementary Budget, contrary to the law.

The new projects were not part of the 2019/20 budget approved by the National Assembly through the 2019 Appropriation Act.

The Supplementary Budget II was meant to cushion Kenyans against revenue loss from the impact of the Covid-19 pandemic.

A report by the Parliamentary Budget Office (PBO) presented to the Budget and Appropriations Committee, which is scrutinising the revised budget, notes that the Treasury violated Article 223 of the Constitution and Section 44 of the Public Finance Management (PFM) Act.

Of concern is the allocation of Sh1.5 billion to Nairobi Metropolitan Services under the Presidency, which may not be related to the virus fight.

PBO has also flagged Sh1.8 billion allocated for the rehabilitation of the Nairobi-Nanyuki metre-gauge railway. The money has already been spent though the repair work is a new project.

There is also an allocation of Sh1.041 billion to projects that had no allocation in the approved budget.


The report also notes that there are approximately 42 programmes under the second supplementary budget that do not have analyses of the fiscal impact of the additional or reduced expenditure for the planned outcomes of the projects.

“Information such as impact of changes on public debt has not been provided,” the budget office notes.

The report wants MPs to ensure the revised budget conforms to the provisions of the Constitution and the PFM Act before it is passed.

PBO also reveals that under the State Department for Infrastructure, roads critical emergency intervention and spot improvement intervention were allocated Sh1.75 billion and Sh1.08 billion, respectively, but the list of targeted projects has not been provided.

The proposed allocation of Sh6.2 billion to settle historical pending bills in the Correctional Services department is also raising alarm bells as it was made without Parliament receiving a report on the audit commissioned to determine their validity.

The transfer of Sh4.5 billion for leasing police vehicles from the Interior ministry to the Treasury has also been faulted.

“The programme has since been transferred back to the National Treasury despite being a House resolution that it be domiciled under the State Department for Interior,” the report notes.

Other new projects include Sh1.15 billion for setting up and rehabilitating water pans in arid and semi-arid areas, Sh200 million for drilling boreholes and installing tanks in Nairobi and Sh40 million for the Korbesa and Malka Galla water supply project.

By Alice Victoria