The Auditor General’s findings on Kiambu County’s bizarre budget has taken a new twist after Controller of Budget Agnes Odhiambo said the items were not in the budget she approved.
An audit report before the Senate Public Accounts and Investments Committee revealed that the county government spent Sh2.1 billion on national government functions.
Among the activities funded by the Kiambu budget, according to the audit report, include allocations for coordination of State House functions, South Sudan Peace process, free primary education and payments to retired Presidents.
“The budget allocations...were not captured in the 2017/18 budget that was submitted to the Controller of Budget by Kiambu County,” Ms Odhiambo, through her office’s communications head Stephen Wangaji, said.
According to Ms Odhiambo, the items neither featured in the county's 2017/18 Annual Budget nor in its 2017/18 Supplementary Budget.
“The items also did not appear in their Quarterly Expenditure Reports submitted for that period. We would, therefore, like to state that the Controller of Budget is not aware of these items,” she said.
While the media focus has so far been on Kiambu County since the audit report emerged, the revelations raise serious questions about the budget-making process and the subsequent step of auditing.
According to International Budget Partnership’s (IBP) Kenya country manager Abraham Rugo, similar cases are all over and the Kiambu case just made news because it is extreme.
“We seem to be observing some recklessness in how budgets are done. Every county has developed at least some form of a County Integrated Development Plan (CIDP) which is followed by an Annual Development Plan (ADP).
"The budget process is supposed to follow those plans and implementation too should strictly follow on what has been approved,” said Mr Rugo.
This, however, has not been the case, Mr Rugo noted. Where spending is on the right things, it is inflated or unsupported.
Otherwise, counties spend on things that were never approved anywhere.
Before the Senate committee, Kiambu Governor Ferdinand Waititu said he was equally shocked with the contents of the reports.
“Mr chairman (Senator Tom Kajwang’), what I have just seen is also new to me,” a cornered Waititu said.
But Mr Rugo says the governor’s admitted lack of information is also telling. “How much does the governor know about what is going on in his own county?” he posed.
Appearing before the Senate committee in April, the Office of the Controller of Budget had made a shocking disclosure that some counties have been forwarding fake budgets for approval.
The scheme involves county executives plucking signed pages from approved budgets and attaching them to sham budgets that were then sent for approval.
“There have been cases where the first page of the county assembly budget is plucked and attached to a report approved by the executive. We now require every page to be countersigned,” Joshua Musyimi, the Director of Research and Planning at CoB, told senators in April.
Other ways counties use to go around strict spending requirements is to not implement the budget as passed.
Often, Mr Rugo said, counties bring supplementary budgets soon after the approval of budgets so as to rearrange allocations.
One county has in the past been found to have had up to six supplementary budgets in a single financial year. The rest of the counties have at least two every year.
With the many supplementary budgets, he said, even the Controller of Budget may not know which budget is which.
“At IBPK, we do a study on budget credibility, which evaluates whether counties implement the budgets that have been approved. But we have realised that counties do not necessarily implement their approved budgets,” he said.
To execute that, counties must be having people at the National Treasury who manipulate the Integrated Financial Management System (Ifmis) to allow payments for non-approved spending.
“Money does not just leave accounts. First, the Controller of Budget approves the budgets and opens the way for money to flow along the budget lines.
"The money is then released through Ifmis. The backend of Ifmis is supposed to be checked by the National Treasury. When you see these audit queries, then you wonder if it was a case of collusion,” Mr Rugo added.