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December 11, 2018

How government is wasting your taxes

President Uhuru Kenyatta and DP William Ruto lay a foundation stone for AIC Kapsabet. /PSCU
President Uhuru Kenyatta and DP William Ruto lay a foundation stone for AIC Kapsabet. /PSCU

Despite public outcry over the broadening tax burden and President Uhuru Kenyatta’s tough talk on graft, a new report has exposed the lavish expenditure of billions by government agencies on non-essential goods and services.

Parliament, the presidency and IEBC top the list of profligate expenditure, according to the latest report by Controller of Budget Agnes Odhiambo.

Parliament alone gobbled up Sh4.3 billion on both domestic and foreign trips, making it the single largest spender on travel.

The presidency, comprising Uhuru’s office, Deputy President Ruto and the Cabinet office, spent Sh725 million on local travel and a further Sh99.4 million on foreign trips.

Last year, Uhuru and Ruto faced a barrage of accusations for using state resources to oil the Jubilee election machine.

The claim featured prominently at the Supreme Court. It was also the subject of a court case filed by the Katiba Institute, which challenged the use of public resources in the ‘Government of Kenya Delivers’ publicity blitz.

On domestic travels, the Parliamentary Service Commission led the pack, spending Sh1 billion and another Sh596 million on trips abroad in the 2017-18 financial year.

The 349-member National Assembly spent Sh1.9 billion on local travel and Sh719 million on trips overseas.

Much of the Sh1.9 billion local travel budget is made up of MPs’ mileage claims for trips made to their constituencies — an allowance that has often featured fictitious mileage claims over the decades.

Read: Uhuru signs into law new taxes passed by MPs

The Parliamentary Service Commission does not make public the details of lawmakers’ mileage claims, including how much each MP was paid during a specified reporting period.

However, there have been claims that some MPs claim as much as Sh1.5 million monthly, without any proof that they indeed traveled to their constituencies.

Last month, the government slapped Kenyans with an eight per cent VAT levy on petroleum products and a couple of levies that have seen the cost of living skyrocket.

The move triggered a huge public backlash, with Uhuru publicly promising sweeping austerity measures.

The new report shows how government ministries and agencies devoted substantial resources to non-essentials in the just-ended election year.

The Ministry of Foreign Affairs, for example, spent Sh800 million on foreign trips alone.

In total, government agencies swallowed Sh8.6 billion on domestic travel and a further Sh3.6 billion on foreign travels.

One of the biggest culprits is the presidency which, the report shows, spent Sh1.4 billion on hospitality. This entails entertainment of guests, decorations and catering services.

IEBC

The troubled Independent Electoral and Boundaries Commission also blew Sh1.3 billion on hospitality alone during the election year.

The commission is dogged by audit queries, with Auditor General Edward Ouko flagging Sh9.2 billion in unexplained expenditure.

The audit queries surrounding multi-million-shilling tenders have been at the centre of a bitter falling out between Commission CEO Ezra Chiloba and Chairman Wafula Chebukati.

Chiloiba was suspended and finally fired two weeks ago for defying summons to answer audit questions. Last week, the commission wrote to many staff members, seeking explanations of various financial issues, signalling that more heads could roll.

IEBC spent Sh4.7 billion on hospitality during the financial year, nearly one-third third of its budget. It also spent Sh859 million on lawyers who represented it in various court battles.

Months to the 2017 General Election, the IEBC was embroiled in protracted legal battles with the Nasa opposition that peaked with the twin presidential poll petitions.

A recent report by a parliamentary committee recommended five-star catering services for MPs. This could push the expenditure beyond the Sh370.3 million spent on hospitality in the last financial year. MPs also want a public health specialist, a revamped gym and blind masseurs.

Amid the push for enhanced funding, the budget implementation review report shows that the Chief-Justic David Maraga-led judiciary spent Sh103 million on hospitality and Sh334.9 million on domestic travel.

Read: Uhuru housing plan demolished as MPs reject taxes for project

Other high spenders on hospitality were ministry of foreign affairs which recorded Sh320.2 million, Interior, Sh106.4 million, and Sports Sh115 million.

Lifting the lid on how lawyers reap big in legal fees from government agencies, the report indicates that the department of basic education alone spent Sh1.5 billion in legal fees.

Surprisingly, the other two State departments in the ministry of education — the state department of university education and that of vocational and technical training — spent nothing on legal fees.

The government also incurred Sh5.9 billion in rent for residential and non-residential buildings, with the Ministry of Foreign Affairs alone forking out Sh1.3 billion.

The sum was likely spent on leased buildings for Kenyan missions abroad and residences for diplomatic staff across the globe.

WAGE BILL

Salaries and allowances for all civil servants took up ShSh377.7 billion of the Sh1.1 trillion budget allocated for recurrent expenditure.

Interestingly, the government spent only Sh318.5 billion on development programmes, as it went on taking loans from bilateral and multilateral lenders to fund its projects.

See: KRA defends 16% fuel levy, says all taxes are punitive

The Teachers Service Commission, which employs over 270,000 teachers, spent Sh216.5 billion on salaries and allowances for tutors, being the largest spender on personal emoluments.

The Ministry of Interior and Coordination spent Sh71.4 billion on salaries, followed by the department of Correctional Services (Prisons at Sh13.9 billion and the IEBC (Sh10.6 billion).

CHALLENGES

In her report, Budget Controller Agnes Odhiambo identified challenges she said affected the budget implementation process.

These include delay in release of funds by the Treasury, frequent downtime of the Intergrated Financial Management System (Ifmis), non-disclosure of Appropriations-in-Aid by some government departments and failure to report on programmes and projects achievements.

“While Ifmis has been rolled out to all Ministries, Departments and Agencies, some experienced challenges in accessing funds and processing payments in Ifmis during 2017-18 as a result of IFMIS downtime,” Odhiambo stated.

Also Read: Don't overburden citizens with high taxes, fight corruption - Raila

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