State House among govt agencies exposed for spending billions outside approved budget

The Controller of Budget (CoB) Margaret Nyakang’o, has revealed that various government agencies, including State House and the Ministry of Interior, spent over Sh3.8 billion outside their approved budget during the 2023/24 financial year, sparking concerns about transparency in the handling of public funds.

In her latest budget implementation review report, Nyakang’o disclosed that State House requested an additional Sh2.858 billion on April 9, primarily for “national security and State functions.” However, only Sh1.242 billion was approved by her office.

While the CoB’s report did not specify the exact details of the national security expenditures requested by State House, President William Ruto made official trips to Ghana and Guinea-Bissau from April 2 to 6, where he met with Ghanaian President Nana Akufo-Addo and Guinea-Bissau's President Umaro Sissoco Embalo.

The meetings were aimed at enhancing bilateral relations and trade partnerships. The president’s delegation included Prime Cabinet Secretary Musalia Mudavadi and the then Defence Cabinet Secretary Aden Duale who is now the Environment CS.

The Ministry of Interior also sought Sh3.165 billion for multi-agency security operations but was allowed to spend Sh2.65 billion.

“The Ministry attributed its Sh2.65 billion spend to multi-agency security operations, preparations for the 2024 Madaraka Day celebrations and compensation to victims of floods in Nairobi,’’ reads the report.

The report notes that the ministry made eight requests to spend beyond its budget between February and May 2024.

While the Constitution under Article 223 permits government spending outside the budget in emergency situations, such expenditure must be regularised by Parliament within two months of withdrawal. The national government is also prohibited from spending more than 10 per cent of its approved annual budget under this provision.

Previous controversies

Nyakang’o’s report comes against the backdrop of previous controversies, such as the Sh15 billion spent by President Uhuru Kenyatta’s administration just days before the 2022 general elections.

In that case, Nyakang’o told MPs that she faced intense pressure to authorise the withdrawal of the funds, with Sh6 billion going to Helios Investment for the Telkom Kenya deal.

For the 2023/24 financial year, the government spent a total of Sh19.1 billion outside the approved budget, which was later regularised in the supplementary budgets of November 2023 and June 2024.

Other ministries involved in excess spending include Agriculture (Sh3.4 billion), Environment (Sh2.02 billion), National Treasury (Sh3.07 billion) and the Ministry of East African Community (Sh1 billion). The National Police Service also recorded an excess spend of Sh2 billion.

Nyakang’o noted that government agencies had requested a total of Sh30.65 billion beyond their initial budget, but only Sh19.1 billion was approved, representing 0.5 per cent of the total national budget for the year.

The report also exposed the country's escalating debt burden, with loan repayments increasing by nearly 30 per cent in the 2023/24 financial year compared to the previous year. Public debt servicing accounted for Sh1.78 trillion, nearly 90 per cent of the Consolidated Fund Services (CFS) budget.

Debt repayment allocations included Sh850.56 billion for interest payments and Sh931.84 billion for principal payments, with Sh763.35 billion designated for external debt and Sh1.02 trillion for domestic debt.

Total spending on public debt amounted to Sh1.59 trillion, representing 89 per cent of the revised estimates for the year.

In addition to the budget overspending by government institutions, the report notes that county governments were not disbursed Sh30.83 billion for June 2024 as outlined in the County Allocation of Revenue Act, 2023.