The National Treasury and Economic Planning has responded to claims of irregularities regarding the withdrawal of Ksh1.3 trillion from exchequer accounts over seven months.

The clarification comes after a section of the media published reports suggesting possible financial misconduct.

In a statement issued on Sunday, March 2, Treasury Principal Secretary Chris Kiptoo said that until the end of the 2023/24 financial year, exchequer requests and withdrawals were processed manually as the automation system was not yet in place. Despite the manual process, he maintained that due diligence was followed and that no public funds had been lost or misappropriated.

According to Kiptoo, all withdrawals adhered to strict legal and financial procedures. He emphasized that every transaction was reviewed and approved by the Controller of Budget (CoB), ensuring compliance with public finance regulations.

“A section of the media has today published a report suggesting irregularities in Exchequer withdrawals, particularly claims of a Ksh 1.3 trillion withdrawal over seven months. While we await the official report from the Controller of Budget, The National Treasury wishes to clarify the fact,” he noted.

Adding;

“Until the end of the 2023/24 financial year, Exchequer requests and withdrawals were processed manually, as the system had not yet been automated.”

To improve efficiency and accountability, Kiptoo said the National Treasury launched an automation initiative on July 1, 2024, in collaboration with the Central Bank of Kenya (CBK) and the CoB. This reform aims to streamline exchequer processes by reducing processing time and enhancing financial oversight. Since its implementation, all National Government Ministries, Departments, and Agencies (MDAs) have been successfully integrated into the automated system.

“However, all withdrawals followed strict legal and financial procedures, with every transaction subject to review and approval by the Controller of Budget, ensuring full compliance with public finance regulations,” Kiptoo added.

“On 1st July 2024, the National Treasury, in collaboration with the Central Bank of Kenya (CBK) and the Controller of Budget (CoB), launched a major reform initiative to automate the Exchequer process. This initiative is designed to enhance efficiency, reduce processing time, improve accountability, and strengthen financial oversight,” the PS stated further.

However, he noted that some transactions, including debt payments, county transfers, the Judiciary Fund, and the Equalisation Fund, were not part of the initial automation phase due to their distinct approval processes. He assured that efforts are underway to incorporate these transactions into the system, with full automation expected by the end of the 2024/25 financial year.

The Treasury reiterated its commitment to transparency, responsible financial management, and the safeguarding of public resources. Kiptoo stated that a comprehensive response would be provided once the official report from the Controller of Budget is received.