Former Treasury Cabinet Secretary Ukur Yatani has been put in the spotlight after Controller of Budget Margaret Nyakang’o told MPs that the CS coerced her to approve payment of Sh15 billion just a few days before the August General Elections.

The money was spent without approval of the National Assembly as required by law, a move that prompted a House Committee to summon Nyakang’o to explain the expenditure.

The Controller of Budget is answerable to Parliament. However, when she was asked to approve the payments, Parliament had been dissolved ahead of the election, thus leaving her office exposed, according to her testimony yesterday.

She told the Parliamentary Public Petitions Committee that Yatani put her under undue pressure to approve the payments. According to her, he created the impression that he was working at the behest of top State officials who needed to make urgent security related payments to contractors.

In one instance, she said, she was given less than 26 minutes to make an approval for Sh8 billion despite her insistence that she was out of office and needed until the following day to authorise the release of the money.

Nyakang’o said she was under duress to approve a controversial Sh6 billion payment for the purchase of Telkom Kenya from Helios, a French company, and another Sh9.5 billion, which was to be paid from the Annuity Fund just a week to the August 9 polls.

She had appeared before the MPs to respond to questions raised in a petition filed by Stephen Mutoro, Secretary-General of the Consumers Federation of Kenya (Cofek) with regards to funds spent by the National Government without approval of the National Assembly.

Last week, the Budget and Appropriations Committee of the National Assembly had raised similar concerns with regards to the payments, which were made before the Executive sought approval from the National Assembly. The law stipulates the conditions under which such payments can be made and MPs are seeking to understand whether or not the law was followed.

To support her argument, the Controller of Budget tabled a printout of a conversation between her and Yatani, which appeared to collaborate the view that she was acting under duress.

In the conversation, Yatani directs her to authorise various payments without delay as they had fallen due and urgently needed to be released. “Evening Controller. We are intending to do Supplementary 2 at least at the end of April. You need to approve this for us immediately. These projects are security related and contractors abandoning the site due to non-payment. There’s extreme urgency,” Yatani says in one of the messages that Nyakang’o presented to the House team as evidence that she was made to act against her will.

Facilitate approvals

MPs heard that on August 4, 2022, Yatani wrote an email to Nyakang’o at 2:13pm, which reads, “Good Afternoon, please also facilitate similar approvals for Infrastructure Ministry for amounts of Sh8 billion and Sh2 billion.”

In a subsequent email sent a minute after that, Yatani allegedly wrote: “H.E might even call you if we don’t deal with this by 4pm.

To which Nyakang’o replied: “Are you saying we have 26 minutes to complete the process? The timing requires up to tomorrow as I am still out of office.” 

And in a message said to have been sent at 3:39pm, CS Yatani reportedly told the Budget Controller: “You need to devise how to deal with it. I am sorry but try.”

Asked by committee chairman Nimrod Mbai why she could not say ‘No’ to the alleged coercion, Nyakang’o said; “It is not a black-and-white, yes-and-no” situation.

“There are very many things that we have to weigh before you arrive at that decision. But what I am saying is that there are loopholes that need to be assessed and my office needs to be protected,” she said.

“I only report to Parliament. I have no other boss yet at that time, Parliament was already dissolved. Where I should have run to is where the duress was coming from.”

She said that she asked for supporting documents before authorising the payments but none was made available by the National Treasury.

“I asked for invoices of what the Sh2 billion was to be used for and only invoices worth Sh411 million were provided. I am still waiting for the invoices of the balance to date. The financial year is not over. Maybe they will bring them,” Nyakang’o said.

Vihiga MP Ernest Kagesi sought to know why the Controller of Budget could not sense that something was amiss with the approvals being sought just days before the elections.

“These were two crucial days and anyone could have raised eyebrows because 60 percent of these billions we are talking about happened in two days,” Kagesi said.

And committee chair Mbai asked: “Here, the Ministry of Defence collects revenue then follows it up in order for the money to come back to them but after the COB refuses to approve, they go ahead to put it in the consolidated funds then within one or two days, the money is approved and goes back to them. Is this regular and within the law?”

In his petition, Mutoro who is yet to appear before the committee despite being asked to do so several times, avers that towards the end of the last term of the Jubilee administration, a staggering Sh55 billion was spent without approval of the National Assembly, contrary to the Constitution.

 The petitioner was concerned that expenditure of such colossal sums was incurred at a time when the country was grappling with a huge public debt and a high cost of living.

Lack of transparency

Mutoro further stated that the lack of transparency and accountability in the run-up to the transition from one administration to the other was a matter of great concern. Further, he was concerned that if unchecked, similar incidents will recur in future, leading to further burdening of the taxpayer.

According to him, efforts to have the matter addressed by the National Treasury had not been fruitful and in his papers, prayed that the National Assembly orders the Auditor-General to conduct a forensic audit of all public expenditure transactions by the national government between July and September 2022. He also asked Parliament to amend the relevant laws to bar outgoing administrations from spending any such public funds irregularly and make any other recommendations that it deems fit.

“Huge amounts of money were allocated to various ministries and agencies at a time when the country may have defaulted on the ever-rising public debt, worst inflation as evidenced by extremely high food and fuel prices over and above the poorly managed opaque fuel subsidy,” reads the petition in part.

According to Mutoro, the inappropriate and illegal use of the Sh55 billion was a pointer to weak mechanisms of transparency and accountability in the run-up to a transition from one government to another and amounted to blatant corruption.

The Kenyan taxpayer, he opined cannot be put in a situation where s/he must finance an expensive election and an opaque transition where colossal sums of money are lost.

“Tracking and recovery of the said funds ought to be made a priority and those who broke the law brought to swift justice,” he said in his petition. “Besides, mechanisms to avert similar incidents from occurring in future must be put in place.”