Tuesday, May 12, 2009



May 12, 2009

By Standard Team
Controversy surrounding the Supplementary Budget took yet another dimension amid revelations that the actual figure involved could be as high as Sh14 billion.

It has now emerged that the Treasury included new budget lines amounting to Sh4.9 billion, pushing up the original Sh9.6 billion — an act that has been termed unlawful and unprocedural. Thediscrepancy, especially in the recurrent budget, is said to have affected 35 ministries, leaving

only five unaffected. Sources at the Treasury said the so-called "computer error" does not make sense, since the same computers cannot introduce new budget lines unless they are keyed in.

Details emerging also point to infighting at the Treasury Budget Office, leading to speculation of possible "sabotage" of the mini-budget.

Treasury sources said the relationship among senior officers became frosty soon after the Director of Budget, Mr Paul Ngugi, was given a one-year extension upon hitting the retirement age.

However, sources at the Finance and Budget committees of Parliament last night confided in The Standard that the figure could be higher than what the minister read to the House.

"We are getting fresh information that the figure could be mind boggling," said a source in the committee who sought anonymity.

Back in Naivasha, area MP John Mututho said that if junior officers had sabotaged the minister, then they should be charged in the law courts.

"I believe Uhuru had no ill-motive but should show us the culprit behind the whole mess or he takes responsibility," he said.

Budalang’i MP Ababu Namwamba said he had given the minister the benefit of the doubt.

"Kenyans always rush to make conclusions, and we should give the issue time as it’s being investigated," headed.

Their story

On Monday, Uhuru and Treasury PS Joseph Kinyua appeared before the Finance and Budget committees to give their side of the story.

The two arrived at Continental House at 5.45pm armed with bundles of documents. In his submission, made available to The Standard, Kinyua is said to have admitted there were inconsistencies in some principal items of the Supplementary Estimates.

"The minister did not mislead the House because the Motion and the Supplementary Appropriation Bill are consistent with the net Supplementary Estimates of each vote as tabled in Parliament," Kinyua told the House teams.

The joint committees had raised 13 questions to the Finance Ministry, which were answered point-by-point in a five-page document.

The committee heard that the overall budget remained consistent with the Motion and Supplementary Appropriation Bill as tabled by the minister.

Asked how many items had inconsistencies and what their worth in monetary terms was, Kinyua explained that the 211 line items consisting of three principal items, which resulted into under-casting of the printed principal items by Sh10.7 billion and the revised principal items by Sh10.4 billion.

Kinyua said there was no intended fraud when the minister made his presentation on the floor of the House. They uttered no word as they walked into Continental House where Nambale MP Chris Okemo and Rangwe MP Martin Ogindo, who chair the two committees, were waiting.

Imanyara’s claims

The joint probe was ordered by Speaker Kenneth Marende last week following claims by Imenti Central MP Gitobu Imanyara that the minister could not account for an additional Sh9.2 billion included in the Supplementary Budget passed by Parliament on April 30.

Imanyara alleged that in requesting for the Supplementary Budget, the minister and Treasury officials had inflated the cost of 200 items, especially on personal allowances in the Education and Office of the President dockets, leading to the extra Sh9.2 billion that the MP claimed the ministry wanted to swindle into payments of discredited pending bills.

The alleged inflation increased personal allowances by huge margins from figures passed in the parent Budget read last June.

When Imanyara raised the issue last Tuesday, Uhuru accused him the next day of lacking the capacity to understand basic accounting and the rationale behind a Supplementary Budget.

He also accused the MP of allowing himself to be misled by ill-informed advisers.

On Friday, the minister appeared to recant by suggesting the discrepancies in the entries could have been caused by a computing error. However, some experts at the Treasury suggest that a consistent error of that nature would have been detected in time by the five Permanents Secretaries and directorates involved in budget-making.

Officials have also questioned the role of police detectives in the probe, suggesting that they lacked the capacity to investigate complex audit and accounting issues.

Is Treasury in safe hands?

By all assessments, Finance Minister Uhuru Kenyatta, and his PS Joseph Kinyua, should receive failing grades for their handling of the Supplementary Budget controversy. But while Uhuru has received the larger share of roasting, Kinyua is likely to come out of it unscathed, even after Uhuru’s humiliating climb down from his high horse on Friday.