Treasury on spot over Sh5bn disbursed to ministries for non-urgent expenses
The audit report shows that in total, the statement of receipts and payments reflected Sh6.53 billion in advances to various Ministries, Departments, and Agencies (MDAs) to cater for various urgent and unforeseen requirements.
Several government ministries irregularly received Sh5.03 billion from the Contingencies Fund, with Auditor-General Nancy Gathungu highlighting instances where the funds were allocated for non-urgent expenses, past events, and irregular expenditures across various ministries.
The Contingencies Fund, established under Article 208 of the Constitution, is designed to address urgent and unforeseen expenditures. The Fund draws from the Consolidated Fund, with the National Treasury Cabinet Secretary required to justify the necessity of each allocation.
More To Read
In her latest audit report for the financial year ending June 2024, Gathungu flagged a Sh3.8 billion expenditure by the State Department for Arid and Semi-Arid Lands (ASALs), which was disbursed from the fund despite lacking the urgency required for such allocations.
“The funds were disbursed from December 2023 to June 2024, and expenditure was paid out from the funds until June 14, 2024,” Gathungu said.
She added that there was no explanation justifying why the activities, which had already been factored into the approved supplementary budget, were instead financed through the Contingencies Fund.
“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,” Gathungu said in the report.
The report further revealed that Sh130 million was disbursed to three other State Departments for expenses that did not meet the threshold for urgent funding. The breakdown includes Sh30 million for the State Department for Public Works, Sh65 million for Crop Development and Sh35 million for Livestock.
“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,” Gathungu said.
Gathungu also raised concerns over the expenditure returns of Sh1.07 billion from three ministries that were not provided for audit. These include Sh500 million allocated to the Ministry of Defence, Sh500 million to the State Department for Internal Security and National Administration and Sh70 million to the State Department for Irrigation.
“In the circumstances, the validity of the amount disbursed from the Fund of Sh1,070,000,000 could not be confirmed,” she noted.
The audit report shows that in total, the statement of receipts and payments reflected Sh6.53 billion in advances to various Ministries, Departments, and Agencies (MDAs) to cater for various urgent and unforeseen requirements.
With these findings, the Auditor-General is questioning the Treasury’s judgment in advancing the funds, calling for greater accountability and adherence to financial management laws.
Top Stories Today
