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The Controller of Budget (COB) has cautioned State agencies against requesting for additional funds immediately the financial year begins.

COB Margaret Nyakang’o says government ministries, departments and agencies (MDAs) fond of requesting for additional funds after their budgets have been approved, or within the first quarter of the financial year undermine the process.

“Frequent requests for additional funding by the MDAs have the potential to undermine the credibility of approved budgets,” said Nyakang’o.

The budget implementation review report observes that for the first nine months of the financial year 2020/21, the cumulative requests for additional funding by MDAs increased by Sh40.3 billion to Sh173.8 billion, equivalent to 9.2 per cent of the total MDAs approved budget of Sh1.89 trillion for the current financial year.

Cumulative requests for additional funding by the Energy, Infrastructure and ICT sector amounted to Sh80 billion, an increase of Sh10.8 billion from Sh69.3 billion requested during the period ending December 2020.

The requested funds comprised Sh22 billion for implementation of flagship projects, Sh6 billion to implement Phase II of the Kazi Mtaani Programme, and the balance of Sh52 billion for “implementing a number of development activities within the EI and ICT sector.”

Highest additiona funding

The State Department for Transport received the highest amount of additional funding to cater for the development of Nairobi Commuter Rail, Kisumu Meter Gauge Railway, and to provide funds for the Kenya Airways rescue package.

“To safeguard the credibility of the approved budgets, the national government should ensure that budget allocation for long-term projects and programs follows the laid down budget-making procedures,” said Nyakang’o.

She said long- term projects should be considered in the outer years in the budgeting cycle, and recommended that all MDAs should strive to ensure all budgeted projects and programs are encompassed in the budget estimates and submitted to Parliament for approval.

“Once approved, MDAs should endeavor to implement the projects and programmes with the allocated funds and within a specified time period,” said Nyakang’o.

Ratification of funds required

She said though the law required MDAs to seek approval of Parliament for expenditures within two months after the first withdrawal of the money, there was a time lag between withdrawal of funds under Article 223 of the Constitution and approval by Parliament.

“The COB recommends that ratification of funds withdrawn under Article 223 of the Constitution of Kenya be within the time specified in the law,” said Nyakang’o.

Cumulative approvals by the COB to cater for supplementary expenditures to MDAs under Article 223 of Constitution amounted to Sh34.9 billion (20.1 per cent of the total requests made). 

The variance of Sh138.9 billion results from the differences arising from the cumulative requests as approved by the Controller of Budget under Article 206 (4) of the Constitution and the actual withdrawals from the consolidated funds service account.