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The National Treasury has refuted claims that it has diverted Sh1.5 billion of the coffee cherry advance revolving fund to other uses at the detriment of the farmers.

Principal Secretary Chris Kiptoo (pictured) denied claims attributed to Githunguri MP Gathoni Wamuchomba who claimed that Sh1.5 billion from the fund had been diverted or misused to the detriment of farmers.

He assured the public and stakeholders that the Sh5 billion allocated for the coffee cherry advance revolving fund (Sh3 billion) and payment of coffee debts Sh2 billion) as part of the approved budget for the financial year 2024/25 remains fully intact.

“No funds have been relocated, diverted or misused in any way.  The national treasury continues to uphold its commitment to transparency and accountability in managing public finances,” said Kiptoo said in a statement. The PS explained that according to section 43 of the Public Finance Management Act accounting officers may request reallocations of funds through formal submissions to the national treasury.

Proposed reallocation

In this instance, the request was for a reallocation of Sh1.5 billion from the revolving fund to support a number of development projects in the sub-sector. “Upon careful review of the request and in strict adherence to the PFM Act, the National Treasury Circular No.10/2024 on guidelines for budget implementation, the national Treasury declined the proposed reallocation,” Kiptoo said.

Section 43 (1) (a) of the PFM Act prohibits the reallocation of funds that are earmarked for transfer to another government entity or person, which applies to the coffee cherry advance revolving fund.

Additionally, Treasury circular No. 10/2024 clearly stipulates that funds set aside for specific purposes cannot be reallocated without explicit approval,” he added.