MPs to probe Sh592bn in Uhuru-era spending

Members of Parliament have initiated a probe into Sh592 billion spent under Article 223 during the Jubilee administration.

National Assembly’s Public Accounts Committee last week received a brief from the office of the Auditor General (OAG) on all the withdrawals and spending under the Article, which allows pre-authorised expenditure by the Executive.

PAC chairman John Mbadi termed the revelations shocking, saying the committee will get to the bottom of all the questionable spending.

“Article 223 is a scene of crime perpetuated by the National Treasury and ministries and departments,” he said.

“This wastage is unfortunate and from the summary already, there is wastage and it is so serious.”

The oversight committee chaired by nominated MP John Mbadi had on April 26, 2023 requested the OAG’s office to conduct a special audit on expenditures incurred under Article 223 of the Constitution of Kenya.

The special report was tabled before the oversight committee on Wednesday by Deputy Auditor General Sylvester Kiini.

According to the document, the Jubilee administration incurred a record Sh592 billion under Article 223.

“There has been a gradual increase in the requests for funding under Article 223 of the Constitution,” Auditor General Nancy Gathungu said in her brief to Mbadi’s committee.

It went from an amount of Sh1.1 billion requested in the financial year 2014-15 to Sh147.39 billion in the financial year 2022-23, representing a percentage increase of 13,299 per cent over the nine years.

According to the report, the government obtained the lowest amount under Article 223 in 2015-16 at Sh450 million, followed by 2016-17, when it received Sh7.8 billion.

In 2017-18, it received Sh42.5 billion, Sh128.1 billion in 2018-19 and Sh41.4 billion in the 2019-20 financial year.

In 2020-21, the Uhuru government obtained Sh80.8 billion and a further Sh146.2 billion in the following financial year.

Speaking to the Star, Funyula MP Oundo Ojiambo said successive governments have misused Article 223.

He called on MPs to move with speed to make it difficult to abuse that section of the law.

“In principle, Article 223, is okay but in Kenya, it has been abused. Successive governments have abused the provision to basically provide room to embezzle and misuse public funds through unnecessary expenditure,” Oundo, who is also a member of PAC, said.

“It is a matter that is now back in the hands of Parliament to make amendments to the law; to make it very clear under what circumstances the government spends money and seeks the ratification of the National Assembly later.”

Some of the mega projects funded under the withdrawals and which Gachungu has flagged include the Sh21.3 billion relief food distribution during the 2016-17, 2017-18, 2021-22 and 2022-23 financial years, and which audit says there were no returns on food distribution.

During the period, Gathungu also highlighted the multimillion-shilling medical equipment and associated services to public health institutions.

“It was noted that equipment valued at Euros 4.4 million, equivalent to Sh555 million in 17 health facilities, were not in use due to various reasons,” the report indicates.

It cites hospitals lacking buildings and the required infrastructure to instal the equipment, while some of the equipment had broken down.

The audit report also revealed poor workmanship in the rollout of the 10,000 Competency-Based Curriculum (CBC) classrooms in secondary schools across the country.

The programme, which was to ensure the provision of classrooms for Grade 6 students transitioning to Grade 7, cost taxpayers Sh2 billion.

“Physical inspection of the CBC classrooms in 215 secondary schools funded by the project revealed that there was poor workmanship in classrooms,” Gathungu said in her report.

“At the time of the audit, there were also nine incomplete classrooms, while 30 classrooms were not in use.”

The report also revealed that 7,340 learners in 187 sampled Junior Secondary Schools did not receive capitation money despite the government releasing Sh13.5 billion in 2022-23 for capitation of Grade 7 learners.

“Further, eight schools did not receive the capitation. This denied learners access to quality education,” the report indicates.

The report, which is set to be tabled on the floor of the House after Tuesday, also flagged the Sh6.3 billion sifted maize flour subsidy that was introduced in the ‘dying days’ of the Jubilee administration.

According to the Auditor General, the objective of the subsidy was not achieved even after the government spent Sh4 billion.

“There were no mechanisms for ensuring that the subsidised maize flour was sold to the final consumers at the subsidised price,” Gathungu noted in her report.

Also captured in the report and which would be part of the probe is the stabalisation of the refined petroleum pump process, which cost Sh5.3 billion between April 1, 2021 and June 30, 2022 as stabilisation for advance sales of local volumes.

Gathungu further pointed out that there was evidence of recovery of this advance payment to the oil marketing companies.

“Further, an amount of Sh2.2 million was paid as administration costs for the period ended June 30, 2023. However, there was no justification for including the stabilisation administration costs in the pump price build-up,” the report reads.

“Demurrage charges amounting to Sh3.1 billion were passed on to the consumers through pump prices. The stabilisation programme may have been hampered by avoidable additional costs, which were passed on to the consumers and may not have cushioned the citizens from the high pump prices.”

Mbadi has sponsored the Public Finance Management (Amendment) Bill 2023 to tie Treasury’s hands in incurring expenditure under Article 223.

Mbadi’s bill, which is currently before the Finance and National Planning Committee, will compel Treasury bosses to seek approval within one week from the National Assembly before any expenditure is incurred under Article 223.