Sh152m returned to Treasury

About Sh152 million meant for two government departments was returned to the Treasury in the 2007/2008 financial year, a parliamentary committee heard on Thursday.

The matter came up as an audit query during the scrutiny of the Budget by the Parliamentary Accounts Committee (PAC). The under-expenditure was a result of the transfer of the Efficiency Monitoring Unit (EMU) and the Public Sector Reform Programme from the Office of the President to the Office of the Prime Minister, which was set up in early 2008.

The permanent secretary in the Prime Minister’s office, Dr Mohammed Isahakia, said the money was underutilised in the PM’s office because part of the functions of the EMU and the reform programme were handled by the Office of the President during the financial year.

The PM’s office thus spent only Sh31 million through the EMU in the last quarter of the financial year. Committee vice-chairman Julius Kones asked Dr Isahakia to quantify the impact on development for unused funds, but his question was not answered.

However, other committee members backed Dr Isahakia’s explanation, saying they were “satisfied”. Public Investments Committee chairman Mithika Linturi, who joined as a friend of the PAC, said the PM’s office had done well with spending Sh31 million in the last quarter, because it was almost a quarter of the amount that ought to be spent as per the Budget.

But as he backed the recommendations, PAC chairman Boni Khalwale, said the money should have been used to buy drugs for hospitals, many of which were strained at the time. Similarly, queries on Sh9 million in pending bills at the PM’s office were also resolved after the controller and auditor-general pointed them out to the PAC.

Dr Isahakia said the pending bills were as a result of “liquidity problems” and the frequent breakdown of the Integrated Financial Management System. Part of the amount was also as a result of a contractor’s failure to present a certificate of completion for the refurbishment of EMU offices in Upper Hill area.

But the permanent secretary added that the bills were finally cleared. Ms Agnes Lutta, an assistant director of audit holding the brief for the controller and auditor-general, warned: “We are concerned that when bills are not settled on time ... it affects the subsequent year.” Dr Isahakia assured the PAC that the PM’s office would no longer have pending bills.