Revealed: Big spenders in Uhuru government

A majority of key government departments overshot their 2014 budgets by large margins, making nonsense of the austerity measures President Uhuru Kenyatta put in place upon coming to power in 2013, a newly released expenditure report says.

The report, published in the official Kenya Gazette, shows the departments spent large sums of unbudgeted funds, revealing the extent of bureaucratic profligacy that continues to reign under the Jubilee government.

Treasury documents show that the departments spent a total of Sh14 billion above budget that was mainly appropriated through the supplementary window that has become a near permanent feature in the past couple of years. 

The government prepared two supplementary budgets in the fiscal year that ended last month — opening the gates for extra spending.

The massive over expenditure is particularly unique in its revelation of the extent to which the departments have been able to use the supplementary window to escape the rigorous budget making as provided for in law.

Budget making takes up to half a year of consultations among ministries, departments and agencies (MDAs), the Treasury and Parliament, which is also required to hold sufficient public and stakeholder hearings before preparing the final document.

“There is a long tradition of bureaucrats trying to circumvent the rigorous budgeting process by leaving out part of the recurrent expenditure to make it look more development-heavy until the window for supplementary budget opens when billions more are added to the recurrent budget when no one is paying attention,” said Jason Lakin, the country manager for the International Budget Partnership, a non-profit organisation.

“There is no question that supplementary budgets are often necessary. But they should be for unforeseen expenditure, not for items we knew were coming but wanted to avoid budgeting for.”

Mr Lakin said the passing of supplementary budgets in retrospect (after the money has been spent)onstitutes a much bigger problem of profligacy because it allows departments to overspend and merely use Parliament to legalise it.

By the time Parliament examines the mini-budget, the money has already been spent, leaving it to play the role of ‘rubber-stamping’ the Treasury’s decisions.

The spending report shows that the State Department for Interior received the highest additional amount of Sh6 billion. Most departments overshot their budgets to meet security-related expenses, pay pending bills and taxes, fight legal suits and pay court awards.

The State Department for Coordination of National Government, which falls under Cabinet secretary Joseph Nkaissery’s docket, overshot its budget by Sh1.69 billion while the National Intelligence Service spent Sh1.6 billion above its June 2014 allocation.

Parliament, which has continuously come under fire for excessive spending, also went past its original budget amount, spending an extra Sh2.26 billion in the year ended June 2015.

The two Houses under speakers Justin Muturi (National Assembly) and Ekwee Ethuro (Senate) indicated that the extra amount was for ‘payment for goods and services.’

There have been calls for legislators’ perks, including sitting and travel allowances, to be reviewed to align them with the country’s economic reality.

A recent analysis by the Business Daily showed that it costs taxpayers Sh2 million every month to keep each of the 416 legislators in Parliament — an amount that excludes car grants and cheap mortgages.

READ: MPs to cost taxpayers Sh2m each per month

The Presidency, which constitutes the offices of Mr Kenyatta and his deputy William Ruto, also shot past its June 2014 allocation by Sh2.1 billion (a 60 per cent jump).

The Presidency’s budget was mainly the victim of high travel and hospitality expenses that arose from Mr Kenyatta’s frequent trips abroad even as he continued to preach the austerity gospel at home.

Raychelle Omamo’s Defence ministry spent an extra Sh1.3 billion, an amount reported to have been used to pay ‘pending bills, taxes and security operations.’

The military has been waging war against Al-Shabaab militants in Somalia but most of the expenses are catered for by the UN under the African Union Mission to Somalia (AMISOM) programme.

The Foreign Affairs ministry under the leadership of Amina Mohammed was another profligate spender that overshot is budget by Sh1.9 billion.

The ministry manages the cost of running foreign missions besides meeting the expenses and paying allowances of delegations travelling with the President or his deputy outside the country.

The list of those who blew their budgets includes State Department for Devolution under Anne Waiguru which spent Sh2.11 billion more.

READ: Waiguru’s ministry fails to account for S.2bn bills

The Department for Science and Technology (Sh1.7 billion) and the Independent Electoral and Boundaries Commission (Sh2.2 billion) also overshot their spending plans.

Recurrent expenditure is mainly used to pay salaries, settle hospitality bills (hosting events and catering), office supplies, rent, printing and aertising, domestic and foreign travel, maintenance and fuel vehicles among others.

The MDAs are expected to analyse their needs for the year and present to the Treasury a solid plan to avoid asking for more money in the middle of the year.

X.N. Iraki, an economics lecturer at University of Nairobi, said supplementary budgets are partly the result of the change in prices in the course of the year even as he warned that spending beyond budgets tends to be wasteful.

“Spending beyond the budget has never been a good thing, it leads to wastage unless the money is used to generate more money, that is investment,” he said.

The extra amounts approved in the two supplementary budgets fly in the face of pronouncements by Mr Kenyatta that there would be no mini-budgets even as his office turned out to be one of the biggest budget busters.

“I hope you have put a lot of thought in your plans because once we finalise this Budget, there will be no coming back to Cabinet mid-year to say: ‘Oh, I need an extra budgetary allocation’. If you hadn’t thought of it before, then it’s not important,” he told Cabinet secretaries last year.

“We are moving away from the issue of supplementary budgets. We have one Contingency Fund and that is not for ministries to come mid-year to say ‘walisahau’. It is for unforeseen emergencies and ‘unforeseen’ is not part of your plan.”

The extra amounts also point to the failure of an austerity plan that the Jubilee government launched on coming to power, especially targeting the travel, hospitality spending. So far the drive has only targeted aertising.

“The reality is that dramatically reducing our expenditure will require major reforms that are not really on the table, including some pretty significant improvements in accountability and getting rid of unproductive agencies like the provincial administration,” Mr Lakin added.

Failure to cut the recurrent expenditure means that the share of development funds will continue to shrink in the coming years — especially when the government starts to pay teachers the extra Sh50 billion they recently won in court.