30 000 000 000 WASTED

A whopping Sh30 billion earmarked for development in the current financial year and released to ministries remains idle in bank accounts, hampering delivery of critical services to wananchi.

The riddle of unspent billions, coming hardly a month before the next budget, has provided the latest indications of how ministries have been unable to roll out projects which were listed in this year’s budget.

This was revealed by Treasury permanent secretary Joseph Kinyua addressing members of the Public Accounts Committee.

Top on the list of culprits are the ministries of Health and Education — among the biggest spenders, with large development budgets.

“Whenever concern is raised, people often think that it is Treasury that has refused to release the money. But the fact is that some ministries sit on billions of shillings that Treasury has already approved electronically for expenditure,” the PS said on Tuesday.

The problem of slow absorption of exchequer releases this year manifests in crippling shortages of drugs in public hospitals and rural dispensaries and delays in critical supplies of equipment and supplies to schools.

The unspent billions have especially created havoc this year, undermining the high profile economic stimulus package, the centrepiece of this year’s annual budget.

Cases of shortage of drugs and some equipment have especially been common. Within the education sector, murmurs have been getting louder over the slow pace of implementation of the so-called centres of excellence — among the high points of the current budget.

The slow utilisation of funds has also affected implementation of stimulus market centres proposed in the current budget.

Officers to blame

On Tuesday, Mr Kinyua said that the Treasury, which is responsible for releasing the money to the ministries, was concerned about the trend of cash remaining untouched in Central Bank of Kenya accounts.

Mr Kinyua said that permanent secretaries and accounting officers, charged with executing projects, were the culprits.

Some of these funds were allocated to the ministries through the Economic Stimulus Programme that was meant to speed up development.

The programme was introduced by Deputy Prime Minister and Finance Minister Uhuru Kenyatta in the last budget. Members of the Public Accounts Committee — a watchdog committee of Parliament that investigates expenditure of public funds — said that the sluggish use of budgeted funds was hurting development programme.

The committee, chaired by Ikolomani MP Boni Khalwale, expressed shock at the revelation by the Treasury PS, citing numerous complaints from schools and hospitals over lack of funds to implement and sustain various projects.

Dr Khalwale cited lack of drugs as a common problem in the health sector, which has often been attributed to lack of funds.

“You must urgently convene a meeting to coordinate use of these funds because this is a serious matter,” said Dr Khalwale.

Mr Kinyua told the committee Treasury had written several letters to the two ministries demanding an explanation as to why they were unable to spend the money.

“The two have said they are not ready,” he said.

A member of the committee, Dr Julius Kones (Konoin, ODM), was concerned about a trend in which ministries rush at the last minute to draw funds from accounts as the financial year comes to an end.

But he was assured by the Treasury PS that measures have been put in place to end the practice and permanent secretaries have been instructed against drawing funds during the last quarter.

Usually these funds are drawn for use on large projects and consumables, but the practice is now being curbed.

According to the PS, ministries are required to submit work plans that show preparedness to draw funds for expenditure during the first half of the financial year.

“Usually this is in not in the best interests of Kenyans and the money is sought for things that do not give Kenyans value. Ministries are now required to provide work-plans alongside their procurement plans. We have issued circulars banning procurement of big projects and consumable during the fourth quarter of the disbursement cycle,” the PS said.

Dr Kones also expressed concern about the blame game over the use of funds, warning that it would hurt efforts to improve delivery of services to Kenyans.

Mr Kinyua also alerted the committee that some accounting officers have failed to account for some Sh345 million in imprest in the past two financial years.

They, however, are now warned that they will be surcharged and their salaries be attached to clear the debts owed to Government if they fail to hold to accounting officers responsible for the imprests.

Other PAC members present at Tuesday’s meeting included Mr Omondi Anyanga, Mr Charles Onyancha and Mr Alex Mwiru.

The problem of underutilisation of funds is usually attributed to lengthy procurement procedures and poor planning. Ministries routinely spend most of what is allocated for recurrent budget-monies for salaries, interest payments, and pensions.

But the government has had major problems with absorbing monies allocated for capital expenditure.