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Missing Sh9.6b is no typo

NAIROBI, Kenya, May 9 -This submission is on behalf of the Partnership for Change a non-violent people’s movement dedicated to ending dictatorial impunity and re-establishing democratic accountability in Kenya.  To better engage the public with public finances we study budgets at central and local levels. 

When the Supplementary Estimates were first made public we formally communicated in writing to the Budget Committee our concern about the short time given for scrutiny of the Supplementary Budget and suggested that detailed scrutiny would identify any inconsistencies or improper provisions ahead of Parliamentary approval.

Unfortunately the supplementary estimates were approved in one afternoon and no member of parliament opposed them.

As we researched the Supplementary Estimates we asked the following questions:

Where is the authority for Variation of what Parliament approved last year?

Where is the authority for the reallocations? 

Even though all variations are supposed to be accompanied by explanatory notes why is it that nowhere is there an explanatory note for over 200 items for Sh9.6b?

Hon. Gitobu Imanyara raised this matter in Parliament on May 5th 2009.  The Finance Minister’s first reaction was to issue a 6 page statement in the National Assembly, in which he strenuously defended the integrity of the supplementary estimates as laid in the House, and further questioned the motives of both Imanyara and other private citizens for airing concern. 

The Finance Minister did not admit to any error before the House and Mr. Imanyara was dissatisfied with the statement as were many Kenyans. 

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Wisely the Speaker of the National Assembly referred this matter of the Sh9.6b to your Joint Committee.  When he first asked his question Mr. Imanyara tabled 20 questionable budget line items and on Wednesday he tabled a list of 200 such items worth just over Sh9.6b. 

Speaker Kenneth Marende has referred this grave matter to both the Budget Committee and the Finance Committee ordering them to inquire into the Minister of Finance’s Statement and report back to the House on Tuesday May 12th 2009 whether or not there are inconsistencies between the estimates of June 2008 and those of April 2009. 

We do not believe that computer error is at play here – it is an afterthought having failed to convince Parliament 48 hours ago.  We believe that if computer error were to blame, the very first response of the Minister would have been to check with his officers and thereby prevent the false statement being read in Parliament. 

They would have found the error in a matter of seconds certainly a shorter time than it took to draft and print the statement he issued on Wednesday May 6th 2009.  Because he did not conduct any check the Statement he issued needlessly mislead Parliament and the country further.  Worse it defamed private patriotic persons who were not at fault.

But to the matter at hand; the Supplementary Appropriations Bill is based on contentious documents and Parliament must satisfy itself that it is proceeding on the basis of a full and frank disclosure of the facts by the Ministry of Finance.  We do not believe he is being frank. 

The recent explanation is a mere after thought after being confronted with evidence of a systematic inflation of the total amounts approved by Parliament by concealing Sh9.6b from Parliament while at the same time seeking a further Sh26,7b on the same budget line items. This is a grave matter and requires further investigation, and we urge you to consider it imperative to the restoration of trust and faith in the management of the public finances of the Government and by extension Republic of Kenya.

The Finance Minister questioned Mars Group’s integrity.  The Budget campaign is a campaign of the Partnership for Change. MARS Group was commissioned by the P4C to conduct the research. The findings were studied and adopted by the Partnership for Change and therefore as the P4C, we stand by our work and by the reputation of Mars Group.  Unfortunately the Minister’s figures do not add up.

On the basis of his own documents as Minister for Finance, the question is are Kenyans satisfied that the documents of account being prepared by Minister for Finance officials are true and further meet proper accounting standards?

There are over 200 such budget line items involved across 35 Ministries and the total figure in dispute is just over Sh9.6b which was removed from the Approved Estimates for unknown reasons. 

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The following budget line items have discrepancies which require explanation:
1.    Personal Allowance paid as Part of Salary
2.    Training Expenses
3.    Hospitality Supplies and Services
4.    Domestic Travel and Subsistence and Other Transport Costs
5.    Office and General Supplies and Services
6.    Research, Feasibility Studies, Project Preparation and Design, Project
7.    Purchase of Office Furniture
8.    Routine Maintenance
9.    Printing, Advertising and Information Supplies and Services
10.    Communication, Supplies and Services
11.    Utilities Supplies & Services
12.    Office and General Supplies and Services
13.    Fuel Oil and Lubricants

These are the same budget lines that generally have caused public concern as the economic situation in Kenya deteriorated.  Unfortunately most of the budget line items which are now contentious relate to the allowances of our teachers, police officers, administration police officers, prison officers, nurses and other decent hard working civil servants.  We would like to submit to you the list of budget line items in the recurrent supplementary budget that require further scrutiny even as we urge you to constitute a further probe into the National budget including the estimates tabled in June 2008 and the supplementary estimates of April 2009.
Apart from the Sh9.6b there are over Sh4.89b inserted into the budget through the device of absolutely new budget line items which were not approved by Parliament in June 2008.

There are also odious debts such as Ken Ren Fertiliser in the National Budget which has been condemned by the Controller and Auditor General’s Report which the Minister of Finance tabled in Parliament on Wednesday.  All these matters require a longer probe than the short one you have embarked on and we are sure the public would appreciate your solidarity in demanding that Treasury and the Ministry of Finance is fully accountable to Parliament.


1.    A Forensic Audit of the Budget for 2008-9 is necessary because, on the face
of it, there are material inconsistencies which perhaps indicate that public funds could have been misapplied.  The computer/ printing error explanation is dubious and probably false – it does not address the doubt inherent in the Speaker’s initial order establishing this enquiry.  In fact computers and printing machines do not make errors – no accounting software exists that properly used could produce such error.  Treasury must take responsibility for this by subjecting itself to a forensic audit if it has nothing to hide.

2.    The Forensic Audit should be conducted independently of Treasury.  Perhaps
the audit could be commissioned by these two committees and an expert Panel of
the Institute of Certified Public Accountants of Kenya.   Even the Treasury has
hired PWC to conduct special audits of security contracting.  The precedent is there, and the need is obvious, especially in view of the Treasury’s recent U-Turns over the past 4 days.

3.    We would request an apology from the Ministry of Finance in view of their climb-down and the damaging statements made against us for merely pointing out error in the budget in the public interest.

4.    We would recommend that only urgent critical and priority spending should be passed during the next phase of supplementary appropriation – the rest should await the National Budget of June 2009. 

5.    The Fiscal Management Bill should be assented to and these committees should request the President through the Speaker to so assent.  This will reduce the monopoly over budgeting currently held by Treasury, which has caused this costly exercise.

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6.    Were this anywhere else in the world, we are sure that Treasury buildings resignations would be in order.

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