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House adopts Sh138.86bn supplementary budget

A sitting of the National Assembly.

The National Assembly has adopted the Sh138.86 billion supplementary budget I for the 2021/22 despite claims by Garissa Township MP Aden Duale that it violates the Constitution.
Although House Speaker Justin Muturi promised to rule on the constitutionality of the mini-budget tomorrow, he allowed the MPs to debate and adopt the report by the House Committee on Budget and Appropriations (BAC) that considered the mini-budget.
The mini-budget, a reorganisation of the Sh3.03 trillion expenditures, unveiled to the House on June 10, 2021 by National Treasury Cabinet Secretary Ukur Yattani, sought post-facto approval by the House on additional expenditures.
The additional expenditures include funding for drought related interventions, security, Covid-19, pending bills, salary shortfall, 2022 elections and expansion of Competency Based Curriculum infrastructure.

Violates the constitution

Mr Duale said the mini-budget violates Article 223 of the Constitution as it exceeds the two months threshold within which post facto approval of the first withdrawal was required.
Mr Duale also noted that the mini-budget introduces new projects and exceeds the 10 percent threshold in terms of programmes as per the Public Finance Management (PFM) Act.
“These are weighty matters Mr Duale has raised. The Constitution has granted powers to do certain things within certain timelines,” Mr Muturi said adding; “I will rule on this matter tomorrow.”
Article 223 (2) of the Constitution requires that any spending under this Article be sought within two months after the first withdrawal of the money.
If this cannot be actualised within two months if for one reason or the other Parliament is not sitting, then the approval should be sought within two weeks of the resumption of the next sitting.
Mr Duale said that the basis for his questioning of the constitutionality of the supplementary budget are documents submitted to the House by the National Treasury indicating that the monies were disbursed from as early as August last year.
“All of us here swore to defend the Constitution. This House cannot pass an illegality. We cannot allow the National Treasury Cabinet Secretary to use this 12th House in its sunset days, as a rubber stamp,” Mr Duale, said.

“Budgeted corruption”

Kikuyu MP Kimani Ichung’wah described the mini-budget presented by the National Treasury to the House as “budgeted corruption”.
“Budget-making is about prioritising our expenditures,” said Mr Ichung’wah as Tharaka MP George Murugara described the National Treasury’s action as an illegality.
“The National Treasury is trying to legalise an illegality,” said Mr Murugara.
Mr Duale listed the Sh2 billion to the Ministry of Defence as among the expenditures that fail Article 223 of the Constitution.
The amount was disbursed on September 10, 2021 on security operations in the country.
The others are Sh2 billion to the Ministry of Defence disbursed on November 25, 2021 on security operations, Sh362.6 million for Covid-19 Vaccines disbursed on August 30, 2021 under the Ministry of Health.
There is also Sh280 million for LCIA arbitration- Channel 2 Cooperation vs KBC- which was disbursed on August 27, 2021, Sh620 million for drilling of bore-holes in informal settlements disbursed on September 29, 2021 under the Ministry of Water and Sanitation.
Mr Duale has also challenged Sh1.7 billion spent on security operations by the National Intelligence Service (NIS) disbursed on November 15, 2021 among others.
Article 223 (4) provides that when the House is done with this report, a Supplementary Appropriation Bill is to be introduced for money spent under this Article.
But Mr Duale noted that some allocations are for monies yet to be spent.
This therefore means that Speaker Muturi will be required to rule whether it is in order for the Supplementary Appropriation Bill to be introduced covering both monies spent and others yet to be spent.
Article 223 (4) is specific that such Supplementary Appropriations be strictly for money spent.
The constitution also allows an accounting officer for a national government entity, other than a state corporation, to reallocate funds between programs, or between Sub-Votes, in the budget for a financial year if there are provisions which are not likely to be utilised.
This is as long as the total sum of all reallocations made to or from a program or Sub-Vote does not exceed 10 percent of the total expenditure approved for that program or Sub-Vote for that financial year.
However, Mr Duale noted that some expenditure adjustments to programmes have “blatantly” exceeded 10 percent.
They include State House Affairs under the Executive Office of the President, which has been adjusted by 47 percent.
The Migration and Citizen Services has been adjusted by 15 percent and Road Safety by 13 percent.
There is also the State Department for Interior, Defence Programme under the Ministry of Defence whose programmes have been adjusted by 13 percent among other programmes in the State Department for Transport, Trade and Energy.
“What is the legality of the Supplementary Estimates submitted to this House given that they did not adhere to this rule?” posed Mr Duale.
Mr Duale further told the House that some of the Article 223 expenditures do not appear to meet the spirit of the Constitution.
He said that some allocations are cutting across various Ministries, Departments and Agencies (MDAs) towards enhanced operations and maintenance as well as salary shortfalls.

Original budget estimates

This he said could have been “reasonably” provided for within the prevailing budget constraints during the annual budget process and should “ideally not constitute a supplementary budget.”
PFM regulation 40 (4) (a) clarifies that the purpose for which approval is sought for a supplementary budget should not include expenditure that, although known when finalising the original budget estimates, could not be accommodated within allocations.
But the list as submitted by the National Treasury to the House does not meet the threshold of unforeseen and unavoidable expenditures, according to Mr Duale.
For instance, he lists Sh620 million for drilling of boreholes in the informal settlement, Sh1 billion towards establishment of modern Neuropsychiatric National Teaching and Referral Hospital, Sh1.5 billion for rehabilitation of Naivasha-Malaba Metre Gauge railway that violate the PFM regulations.
The House was told that many new projects have also been introduced in the supplementary contrary to the PFM regulation 40 (8).
The regulation requires that any new policy initiative including capital projects can only be introduced in the annual estimates.
But Mr Duale says that there are 16 new projects in the State Department for Transport, 50 new level III hospitals in the Ministry of Health.
The State Department for Interior, Correctional Services, Crop Development and Ministry of Energy among others also have new projects. –