CS Yatani imposes three-year freeze on hiring

The government has frozen hiring for the next three years in austerity measures to reduce the country's wage bill.

Government agencies are headed for budget cuts of monumental proportions following Treasury’s tough conditions for approving funding requests presented by ministries and state departments.

Targeted in the cuts are allocations for consumable goods, staff upgrade, ICT equipment and funding for parastatals.

Treasury CS Ukur Yatani wants the saved funds prioritised to drive the Big Four agenda “to build on the progress made so far as the state confronts unemployment, poverty and inequality.”

There will be no recruitment of staff in the next three years unless a ministry, state department or agency (MDA) gets the approval of the Treasury.

Yatani, in a circular to all principal secretaries and other accounting officers of the national and county governments, says there will be no costing for recruitment in the 2019-20 budget.

The directive further stops ministries from seeking funds for interns or any planned staff upgrades, meaning government workers may not get a pay rise soon.

Ministries will also be required to get written approval from Treasury confirming availability of funds before putting a salary review request to SRC.

“Allocation for personnel emoluments must be supported by Integrated Personnel Payroll Data (IPPD),” Yatani says in the circular with guidelines for the preparation of the 2020/21 – 2022/23 medium-term budget.

In the dossier, the CS gives the strongest hint that Treasury will no longer fund profitable parastatals.

Yatani, who took over from Henry Rotich - out of office on 24 charges related to the Arror and Kimwarer Dam scandals - is keen on weaning parastatals off state support.

He has proposed that money transferred to the entities be factored on their revenue base and the savings channelled to other sectors.

“Sector Working Groups (SWGs) should critically analyse the revenue-generating potential of SAGAs in their respective sectors,” he says.

The directive further stipulates that state agencies can’t bid for resources without a performance review, reports which must be presented prior to budget talks.

The Treasury boss has further maintained there will be no funding for projects with no clear output, key performance indicators and targets.

Ministries are expected to undertake programme performance reviews (PPRs) detailing the progress of targets spelt out in the financial year 2016-17 to 2018/19 budgets.

“Accounting officers should note that their respective MDAs will only be allowed to bid for resources after finalizing the reviews,” Yatani says.

Even when approved, the money will be given on the basis of how the funding need helps achieve President Uhuru Kenyatta’s Big Four agenda.

On this, accounting officers have been asked to review all proposed ministries, departments and agencies budgets for 2020-21 to align them to Big Four.

Other factors would be a project’s link to MTP3 of Vision 2030; the degree of addressing job creation and poverty reduction; cost-effectiveness, and sustainability.

“Each programme should be confined under one ministry and all functions should fall within programmes; there should be no duplication of programme names,” the CS directs.

Accounting officers have also been barred from presenting budget proposals before they analyse previous budgetary allocations, actual expenditure and achieved outputs.

Yatani is also pushing for cuts on consumable goods and services, saying no allocation will be provided unless the request is supported by service provision agreements.

Demand notes and documentary evidence of past trend – how the goods have been procured before - will be required.

The Treasury further warns ministries against exaggerating costs of budget needs, saying those that violate the set ceilings will be checked.

To regulate spending on ICT, argued to be a fertile ground for fictitious contracts in most government entities, Yatani has directed that the items be procured by the ICT ministry.

Ministries will have their computers, printers, networking equipment and software procured in one pool by the ICT ministry.

This will include procurement of ICT professional services and purchase of photocopiers, among other specialised equipment.

The CS has directed that for such a request to be approved, a state agency must justify to the SWG that the ICT Ministry has approved the same.

Treasury, in the circular, reiterated Uhuru’s order on new projects saying PSs and other accounting officers can only budget for them with the Exchequer’s approval.