Treasury accused of tabling unfunded budget

MPs have accused the National Treasury of increasing the 2019/20 budget without indicating how it would be financed given the significant under-performance of projected revenues caused by the Covid-19 pandemic.

The lawmakers noted that such increments raise concerns just two months after the passage of a second supplementary budget mainly to cater for the disease.

The National Treasury was also not spared for ignoring resolutions of the National Assembly when preparing the Sh14.37 billion 2019/20 Supplementary III Budget that was tabled in the House on Tuesday last week, seven days to the end of the current financial year.

A report of the House Committee on Budget and Appropriations (BAC) notes that in presenting the third supplementary budget in a financial year, the National Treasury did not explain how it will be financed.

ADDITIONAL EXPENDITURES

“There is no information for additional sources of revenue for financing additional expenditures suggesting that financing will be accrued from debt,” the report adopted by the House on Thursday last week says.

The MPs also reduced the proposed increased expenditure by the National Treasury to Sh11.89 billion as they adopted the committee’s report.

Budget committee vice chairperson Moses Lessonet noted that although the National Treasury indicated that the revised budget contains approvals granted under Article 223 of the Constitution, the failure to provide supporting documents makes it difficult to ascertain when the first withdrawal was done.

Article 223 of the Constitution gives the government the leeway to spend money that has not been appropriated by the National Assembly to cater for emergencies.

However, the approval must be sought within two months of the first withdrawal.

During the deliberations and approval of the 2020/21 budget estimates, the National Assembly resolved that all expenditures incurred under Article 223 of the Constitution should be accompanied by proof of payment.

ADDITIONAL ALLOCATION

The National Treasury has not adhered to this resolution.

Mr Lessonet said it would have been expected that most expenditures would be rationalised and only priority expenditure especially those that are Covid-19 related would receive additional allocation.

However, the report notes that non-priority expenditures particularly on Operations and Maintenance are still being given significant priority despite the loss in national revenue.

“Some new items have been introduced in the supplementary III budget contrary to section 40 (8) of Public Finance Management Regulations, 2015,” says Mr Lessonet.

For instance, the Ministry of Lands was allocated Sh85.5 million to buy new vehicles, State Law Office Sh2.3 million for the purchase of office furniture and general equipment and the Presidency Sh47 million for other recurrent expenditure as well as Sh5 million for fuel oil and lubricants.

EMERGENCIES

The committee in exerting its budget-making authority, rejected these allocations and had them pushed to the next financial year on account they are not emergencies.

“As a committee we rejected these allocations because they are not a priority. They can wait until the next financial year,” Kitui Central MP Makali Mulu said.

In rejecting the proposals, the House was categorical that its recommendations and the adjustments be reflected in the Third Supplementary Appropriations Bill.

The MPs are further concerned that the information provided by the National Treasury on conformity to fiscal responsibility principles and objectives is scanty.

“It is difficult to evaluate going forward whether government borrowing will be used only for the purpose of financing development expenditure and not recurrent expenditure,” the report states.