Budget chief wants freeze on trips to tame wasteful spending

BY JAMES ANYANZWA

NAIROBI, KENYA: The Office of the Controller of Budget wants more power to tame wasteful spending in government.

 The vice is spiraling out of control. Extravagant spending in State operations has become a major concern, with economists estimating the annual revenue loss to be about 30 per cent.

Controller of Budget Agnes Odhiambo says a lot of resources are wasted on conferences, seminars, domestic and foreign trips, hospitality and trainings.

“It has been observed that in ministries, departments and State agencies and county budgets, there has been a substantial allocation to activities such as travelling and hospitality, some of which may not directly contribute to development,” she says.

“We are analysing the expenditures of both the national and county governments before we issue a report.”

Mrs Odhiambo says her office is working on a legal framework to tame wasteful and non-productive expenditure of resources.

 “This situation must be contained. Some countries are suffering from fatigue because of the influx of Kenyan delegations,” Ohiambo told a parliamentary Budget and Appropriation Committee last week.  “We expected savings from the merging of ministries but we are still seeing high personal emoluments.”

The Controller of Budget Bill which seeks to give powers to the Controller of Budget to interrogate county and national budgets before they are approved by county and national assemblies, is still at the Attorney-General’s Office.

Prudent consideration

Odhiambo underscored the need for her office to scrutinise government budgets and recommend action to Parliament and the Senate.

“We are putting together the Controller of Budget Bill that will allow us to interrogate both county and national budgets before their approval. We have heard cases of some counties allocating resources to expenditures that are deemed not to be core,” she said.

It is feared that plunder of public resources by both county and central government entities will impede efforts to attain double-digit growth, in line with Vision 2030.

“There is need to undertake a careful study of government expenditure to ensure such expenses are rationalised and incurred only when necessary,” she says.  According to the Controller of Budget, demands for increase in salaries and allowances by civil servants affect equitable allocation of budget. This is because as more funds are channeled to personal emolument expenditures, it leads to a decrease in allocation for priority programmes during the financial year.

“The frequent agitation for salary and allowance increment needs to be diligently addressed as the rise in wage bill may not be sustainable in the long run,” she says.

“There should be a deliberate effort to synchronise salaries in order to motivate government employees to deliver quality services to the public.”

Revenue shortfall

But even with ballooning and wasteful public spending, revenue collection has had its own share of challenges.  The Kenya Revenue Authority  has failed to meet its targets in the last two financial years.

The shortfall in revenue collection has resulted in a rise in the public debt such that by the end of May 2013 the public debt stood at Sh1.89 trillion and was Sh2.06 trillion as at the end of September 2013.

“Although this may be within the government borrowing threshold, there is need to contain the sprawling public debt which may not be sustained if the trend is not contained,” said Odhiambo.

“Increased borrowing comes with extra cost in terms of interest payments.  There is need for the government to widen the tax base to increase revenue collection and maintain the public debt to management levels.”

Flawed procurement

According to economists, avenues through which public funds are lost include State wastage and flawed procurement contracts.

Dr Thomas Kibua, a senior economist for the African Development and Economic Consultants said the Government loses up to 30 per cent of its annual budget on workshops and foreign trips.

Other means through which money is lost are consultancies and inflated public contracts — often irregularly awarded to rogue and briefcase contractors.

The State can be a wasteful entity. We need to audit and monitor Government expenditures at all times,” says Kibua.

“A lot of money is often wasted on seminars, workshops and flawed procurement.”

In this year’s budget,  the Budget and Appropriations Committee directed Treasury to cut spending on hospitality supplies, foreign travel, printing and advertising. These non-core expenses consume a whopping Sh1.3 billion.    

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