Treasury admits Sh73 billion budget error, seeks amendment
The correction comes amid increased monitoring of Kenya’s public finances, with legislators keen on ensuring budget transparency and fiscal discipline before the 2025-2026 financial year budget is finalized.
The National Treasury has admitted that Sh73 billion was mistakenly included in the Budget Policy Statement (BPS) submitted to Parliament, prompting the government to seek amendments to correct the figures.
In a letter dated February 25, 2025, Treasury requested the National Assembly to approve a reduction of Sh73 billion in the ministerial expenditure under the State Department for Medical Services.
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Treasury Cabinet Secretary John Mbadi explained that the amount allocated to the Social Health Insurance Fund (SHIF), was included in ministerial spending but had not been factored into the fiscal framework, creating a discrepancy between the reported figures.
“However, the said amount is not included in the fiscal framework, thus causing the difference between Sh4.336 trillion and Sh4.263 trillion,” the letter states.
The National Assembly Committee on Finance and National Planning first identified the inconsistency last month during a meeting with Treasury officials.
Committee members demanded an explanation after discovering that Treasury documents listed two different expenditure figures for the 2025/26 budget: one indicating Sh4.263 trillion, while another showed Sh4.336 trillion.
Treasury’s initial budget breakdown had allocated Sh3.096 trillion for recurrent expenditure, Sh725.1 billion for development projects, Sh436 billion for county government transfers, and Sh5 billion for the Contingency Fund.
However, another Treasury document presented a total budget of Sh4.336 trillion, with different allocations. It included Sh2.562 trillion for the National Government, Sh2.493 trillion for the Executive, Sh42.4 billion for Parliament, Sh25.7 billion for the Judiciary, and Sh405 billion for county revenue allocations.
The Treasury’s request to amend the figures is aimed at ensuring consistency between the ministerial expenditure and the fiscal framework.
CS Mbadi clarified that once the adjustment is made, the total ministerial expenditure will amount to Sh4.2 trillion.
National Assembly Majority Leader Kimani Ichung’wah commended his colleagues for identifying the discrepancy, emphasising the need for accuracy in budget planning.
“I hope this letter now clarifies the issue because we don’t want another computer error,” he said.
Treasury’s admission of the error has raised concerns over government accountability and financial oversight.
MPs are pushing for greater scrutiny of budgetary allocations to prevent future errors that could affect service delivery and economic planning.
The correction comes amid increased monitoring of Kenya’s public finances, with legislators keen on ensuring budget transparency and fiscal discipline before the 2025-2026 financial year budget is finalised.
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