Treasury Cabinet Secretary Henry Rotich was hard pressed to explain to the Parliamentary Accounts Committee why the Government did not spend more than Sh37 billion allocated to it in the 2010/11 financial year.
Parliamentary Accounts Committee Chairman Ababu Namwamba holds up documents showing Government expenditure.
According to audited figures, ministries and State departments failed to absorb the money — which ended up being returned to national coffers — despite many projects requiring cash.
The committee warned that the worrying absorption rate of development cash is discouraging development partners, with many of them now shying away from funding projects in Kenya.
Weakness
“Other countries like Rwanda are ready to capitalise on this weakness and lack of funds’ absorption to court development partners,” said committee chairman Ababu Namwamba.
Part of the Sh37 billion returned was a result of 44 ministries failing to absorb Sh26 billion in 2010/11 as budgeted for by Treasury.
However, it was an improvement on net under-expenditure, compared to the Sh54 billion recorded the previous year.
Rotich attributed the under-expenditure to the slow implementation of projects and Exchequer inadequacies.
He also blamed the situation on errant accounting officers who failed to approve payments, delayed disbursement of donor funds and failure to submit expenditure returns to development partners.
“We have been relying on circulars to issue memos regarding failure to approve payments. But now that we have the Public Finance Management Act in place, our circulars will be legally backed, and anyone who fails to toe the line will face the consequences,” he said.
Rotich told the committee that Treasury will be bringing a Bill to the National Assembly to further address the absorption of funds.
However, Namwamba took him to task for repeating answers previously submitted to the committee by his predecessors.
Lack of seriousness
“The response is generic because what you have given was captured by the committee last year, and it is not a good practice to repeat the same things without a change,” said Namwamba.
“It is a perfect and interesting cut-and-paste response that shows lack of seriousness in the Treasury. It raises serious concerns as to what the Treasury is doing to address the challenge of absorption of budgeted funds.”
Deputy Auditor-General Alex Regeru also warned that if the trend does not stop, the country will be staring at a financial crisis compounded by underdevelopment.
“We are competing for these funds at a global level, and if we are not ready to absorb them, then it will be bad for the country’s development programme. The resources that are supposed to help the common person at the grassroots are being rolled back to the Treasury.”
By MOSES NJAGIH, The Standard
