Treasury faulted over projects sneaked in supplementary budget

The Treasury is on the spot for introducing new projects in the supplementary budget drawn to cushion the country from the ravages of the Covid-19 pandemic.

The projects, among them the allocation of Sh1.5 billion to the Nairobi Metropolitan Services (NMS) and Sh1.8 billion for the rehabilitation of the Nairobi-Nanyuki railway, were not factored in the 2019/20 budget.

A report by the Parliamentary Budget Office (PBO) notes that the National Treasury violated Article 223 of the Constitution and Section 44 of the Public Finance Management (PFM) Act by introducing the projects.

The PBO, which advises Parliament and its committees on fiscal matters, presented its report to the Budget and Appropriations Committee (BAC) that is scrutinising the Supplementary budget.

The report wants MPs to ensure that the revised budget conforms to the provisions of the Constitution and the PFM Act before it is passed to avoid the possibility of being challenged in court.

Article 223 of the Constitution provides that the national government may spend money that has not been appropriated by Parliament and seek post-facto approval within two months of the first withdrawal on condition that the amount budgeted for was insufficient.

The government can also spend if a need has arisen for expenditure for a purpose for which no amount was appropriated by the National Assembly.

That need may be a natural disaster like floods, drought, and a pandemic like Covid-19 or an emergency that cannot wait for Parliament to appropriate resources.

While Covid-19 is an emergency that may have not waited MPs to appropriate public funds, the allocation of Sh1.5 billion to the Nairobi Metropolitan Services (NMS) under the Presidency, is a new project that may not be related to the fight against the pandemic.

Interestingly, the proposed allocation does detail the programmes it will deliver.

“It is imperative to note that the PFM Act prohibits introducing new programmes at the supplementary stage,” the PBO report states.