Last week, Kenya’s Controller of Budget Dr Margaret Nyakang’o, revealed on national TV that her official salary has been inflated (by up to three times) in the books kept by the National Treasury. According to Dr Nyakang’o a triple provision of her actual salary has been programmed into the IFMIS payment portal, which state of affairs makes it possible to draw the funds at will. Indeed, the way Dr Nyakang’o spoke – seemingly surprised, disappointed and appearing to be seeking an intervention by blowing off the lid – it is possible that someone could already be taking a tidy monthly sum in her name, and in the names of several other State Officers whose salary budgets she says are also affected. For those who want details, the Controller of Budget earns a gross salary, including allowances, of KSh 792,515.
This got me thinking. After the National Assembly votes and approves the Budget, who is tasked to enter the approved figures into the IFMIS payment portal? Apparently, it is the Treasury. I then had a second question. Is this wise bearing in mind that the Treasury has a history of altering parliamentary budget approvals and a predisposition to spend without parliamentary approval? I have two examples of this in mind.
In March 2023, we discovered the Treasury was at the center of the biggest uninvestigated scandal of recent times which took place in the four days running up to the last general election. Just seven months ago, the Controller of Budget told a Parliamentary Committee that she was coerced by Ukur Yattani, the then Cabinet Secretary for Treasury, in the name of the then President, to sign off on KSh 22.4 billion in unapproved expenditure. This serious allegation, made before the media, has not been investigated by the Ethics and Anti-Corruption Commission. Its details are buried in the Controller of Budget’s Annual Report for 2022-2023, but it’s not mentioned in the final report of the Budget and Appropriations Committee of the National Assembly, before which the serious allegation was made.
The four day spending spree was concentrated around the Presidency, Treasury, Interior Ministry and populist subsidy schemes run through the food and energy sector ministries. Three road contractors were paid upfront a total of KSh 9.45 billion for what were euphemistically described as flagship infrastructure projects. The Controller of Budget queried why these payments were being made ahead of contract without any justification, but after being given a 26 minute ultimatum to pay, she signed off on the road contractors’ money. Half this amount, or KSh 4.9 billion, was to paid to a single contractor to widen the Nairobi Eastern Bypass, which substantially runs along the perimeter of a ranch owned by the family of a very prominent Kenyan.
Let’s take another example from the last financial year. The latest Budget Implementation Review by the Controller of Budget documents a massive KSh 62 billion variance between the payroll records of ministries, departments and agencies and the overall IFMIS system run by the National Treasury. The reason for this variance is that across government, a practice has developed of making payments “outside the prescribed payroll management system.” Mostly, these are “payments for casual employees, salary advanced to staff and other staff allowances.’’ Here, the obvious corruption risk is the ghost workers phenomenon and attendant embezzlement of taxpayers funds. KSh 62 billion is half the budget of the Ministry of Health.
Both examples are instances of “budgeted corruption” which I charge is a longstanding practice within the National Treasury. The current Cabinet Secretary for the National Treasury denies budgeted corruption exists but it does, and we have seen it before. Simply put, it involves manipulating and padding budgets to deceive Parliament into authorizing extra money for “discretionary” use. This technique was last documented during the 2009 Supplementary Budget when the then MP for Imenti Central Gitobu Imanyara and some friends revealed the surreptitious creation by the National Treasury of an extra Ksh 9 billion by manipulating budget entries presented for parliamentary approval. A joint parliamentary committee investigation confirmed the budget alterations and ordered the then Finance Minister to withdraw and resubmit a new Supplementary Budget to the National Assembly. The Joint Committee accepted the Finance Minister and National Treasury’s explanation that the budget alteration was a computer error, but still ordered a forensic audit of the IFMIS and the Budget over a two-year period.
To date, fourteen years later, no such forensic audit has ever been carried out.
Ex-President Uhuru Kenyatta famously said government loses Ksh 2 billion a day to theft. Some may have thought he was exaggerating, but the Controller of Budget’s two revelations alone account for something in the region of KSh 178 million every day of the year.
With the foregoing, the one thing we must guard against is falling for the ‘attack the messenger sub-text’ that is taking root in the national press, which since her March 2023 tussle with Ukur Yattani, has run along the lines of saying Dr Nyakang’o should either resign from government or just shut up. In my humble opinion, Kenyans should instead rally behind Dr Nyakang’o and point the accusing finger at the true culprits within the National Treasury. At least during the computer error saga, there was a parliamentary investigation and a published report. Why are we just letting this scam slide?