Treasury's Sh57b budget shocks House team

The National Assembly’s Budget and Appropriations Committee is alarmed by the colossal Sh57.1 billion request by Treasury for additional funding in the current 2014/2015 financial year.

This came as MPs approved the money but warned that revenues to be raised by the Kenya Revenue Authority could not meet the additional expenditure. It’s the strongest indication the government will either cut down on some projects or move into incurring more debt by borrowing both internally and externally to fill the gap with only three months left in the financial year.

“The approval of the supplementary estimates by this House will effectively increase overall discretionary expenditure to Sh1.24 trillion from the Sh1.18 trillion approved in the Appropriations Act of 2014,” the team’s report tabled last week said.

The legislators were angered that the National Treasury is trying to seek more money without explaining the source of the revenue. The report is expected to be adopted by the National Assembly this week.

Committee chairman Mutava Musyimi said it is not clear from the information submitted to Parliament where the new funds will come from, noting the current performance of ordinary revenue is projected to be less than expected.

“The supplementary estimates do not propose any new sources of revenue to fund the additional expenditures. They also do not indicate any new commitments from development partners. Thus, it is likely to increase the country’s indebtedness,” he said.

He added, “This supplementary budget may lead to further reductions in the budget during a future supplementary or a rise in actual commitments if exchequer issues are not made on time.”

The committee recommended that in future, submissions for supplementary estimates should be accompanied by a statement indicating sources of revenue to finance any additional expenditure.

Spending units

It also recommended the additional resource approval to spending units should be pegged on the absorptive capabilities of ministries, departments and agencies so as to free resources to more deserving areas. The Budget and Appropriations Committee decided to reallocate Sh225 million allocated to food supplements for HIV and AIDS patients under the Ministry of Health to Kenyatta National Hospital Cancer Centre for Excellence.

The committee recommended that out of the Sh77 million allocated to Mathare and Nanyuki Hospitals for validated Bills, Sh71 million was reallocated to Kenyatta National Hospital Cancer Centre for Excellence and the balance of Sh6 million be reallocated for payment of pending bills relating to ongoing construction works at the Mathare Teaching and Referral Hospital.

It also recommended the reduction of Sh200 million of the allocation made to the State Department for Interior meant for National Government Restructuring and re-allocate the same to the prisons services to offset pending bills, construct houses for staff, improve staff remuneration, implement reforms in the service and decongest the prisons.

The committee, however, failed to approve Sh374 million allocated to Kenya National Safety Net, Sh1.2 billion allocated to National Treasury for ongoing works and payment of outstanding bill as well as Sh5 billion meant for the National Bank of Kenya rights issue. The three allocations were left pending as the committee requires more information.