Days after freezing capital expenditure, the government has moved to stop pilferage of public resources through cost escalations and manipulations of budgets by State corporations.
The National Treasury has now directed all parastatals to present rationalised budgets from today (Monday), which should not exceed what was spent last year.
In a circular, the new Treasury Principal Secretary Julius Muia says parastatals should submit an itemised breakdown of personnel emoluments, overtime payments, local and foreign training expenses for both staff and board members.
Other details required in the template are board expenses, legal fees, consultancies, office expenses, advertising, travelling expenses and expenses directly relating to the operations of the entity to realise its mandate.
According to the circular, State corporations are expected to rationalise the recurrent budgets for this year’s budget (2019/2020) to not more than the actual recurrent budget for 2018/2019.
BIG FOUR AGENDA
They will also now be required to seek written permission from the National Treasury before spending any money, even for the ongoing projects.
They will also not be allowed to put any money into the new development projects, until a review of their individual budgets is done.
“As you are aware, the Head of Public Service issued a circular communicating the directive of the Cabinet that all State corporations and semi autonomous government agencies are allowed to spend an amount equivalent to one quarter of last year’s approved budget to support all priority expenses over the first quarter of the 2019/2020 financial year,” Dr Muia says.
State corporations should also submit a full breakdown of the capital expenditures that have written approval from the National Treasury.
Dr Muia says a team comprising officials from respective line ministries, the Presidency and the National Treasury will undertake the review of the budgets and to ‘refocus the expenditure to support the Big Four agenda and address cost/expenditure escalations’.
“Accounting officers of respective ministries/State departments are requested to nominate senior officer (s) conversant with sector policies and budget issues to accompany the team from respective state corporations during the consultative meeting,” Dr Muia says.
The consultative meetings start today at the National Treasury offices and will go on till August 30.
The Communications Authority of Kenya, Kenya Civil Aviation Authority and Kenya Ports Authority will be the first according to the schedule.