Auditor-General Nancy Gathungu has raised questions over Sh10.19 billion incurred on the maize flour subsidy programme and the acquisition of Telkom shares that was not approved as required by the Constitution. 

Of the Sh10 billion incurred, Sh4 billion was spent on maize flour subsidy and Sh6.1 billion for Telkom (K) shares by the State Department for Crop Development and the National Treasury, respectively. 

The Auditor General further flagged 15 ministries, departments and agencies (MDAs) that got additional funding under Article 223 of the Constitution  

In her report for the 2023/2024 financial year, Gathungu regretted that despite the expenditure, there were no guidelines in place on how unapproved withdrawals from the Consolidated Fund should be dealt with. 

MDAs are allowed to access additional funding during the budget implementation period if the amount appropriated for any purpose under the Appropriation Act is insufficient or a need has arisen for expenditure for a purpose for which no amount has been claimed by that Act or money has been withdrawn from the Contingencies Fund. 

The report says that among the biggest beneficiaries of the additional funding are the Arid and Semi-Arid Lands (ASAL) and the Regional Development Humanitarian department, which was allocated Sh4.3 billion for emergency response interventions for people affected by floods and drought.

The Crop Development was also given Sh3.065 billion for emergency response interventions on account of El Niño and for the fertiliser subsidy programme. Of the Sh3.065 billion, Sh3 billion is for the fertiliser subsidy and Sh65 million is for emergency response interventions. 

“During the year under audit, additional funding under Article 223 of the Constitution to Ministries, Departments and Agencies (MDAs) amounted to Sh23,667,017,803,” the report reads. 

El Niño funds 

The National Treasury received Sh5 billion, out of which Sh4 billion was for the Kenya Revenue Authority (KRA) and Sh1 billion was a donor-funded project.

The National Police Service (NPS) got Sh2 billion for Medical and GPA insurance. 

The Ministry of Defence got Sh500 million for emergency response interventions on account of El Niño, and the State Department for Roads Emergency response interventions Sh1 billion on account of El Niño as well.

Other MDAs that got El Niño funds include Public Works, which was allocated Sh30 million, Irrigation Sh70 million and Livestock Sh35 million for the emergency response interventions, while Cooperatives was given Sh1.1 billion for mopping up of excess milk. 

The Forestry unit was allocated Sh2 billion while Environment and Climate Change was given Sh60 million to host the 6th United Nations Environmental Assembly (UNEA 6). 

The report, at the same time, has also raised questions over how 15 MDA’s incurred expenditure for confidential security operations. 

Gathungu said there is a need to enhance accountability of the confidential expenditures through review of the regulations to clearly define entities eligible for confidential security related expenditures, and to specify what constitutes security-related operations. 

Further, she told entities to establish internal oversight mechanisms and processes that include detailed budget projections and post-operation financial summaries to address risks and ensure responsible use and accountability of the funds, beyond the certificates. 

The measures, she said, will strengthen governance, foster trust, and ensure funds are utilised responsibly and in an accountable manner without compromising State security. 

“During the year under review, fifteen (15) Ministries, Departments and Agencies (MDAs) listed below incurred expenditure for confidential security operations,” the report reads before going ahead to list them. 

The report adds that in all the15 MDAs, certificates of confidential expenditure were issued, supported by a declaration from the respective Accounting Officer affirming proper use of funds in compliance with Regulation 101(5) of the Public Finance Management (National Government) Regulations, 2015. 

The MDA’s include the Department for Correctional Service, National Police Service (NPS), Ministry of Defence, State Department for Foreign Affairs, State Department for Diaspora Affairs, State Department for Lands and Physical Planning, State Department for Mining, the Judiciary, National Intelligence Service (NIS), Office of the Director of Public Prosecutions (ODPP) and the Judicial Service Commission (JSC).