In Summary
  • The government is struggling to finance its current budget, with an Sh84 billion shortfall in revenue collection targets.
  • Henry Rotich is planning to slash the Sh302 billion allocated to the counties in the current financial year by between Sh15 and Sh17 billion.  

Auditor-General Edward Ouko has raised a red flag over the misuse of billions of public funds by state corporations and constitutional commissions in his latest report.

He blames the wastage on failure to follow procurement laws, over-payment of allowances, non-remittance of employees’ statutory deductions and a general disregard for public finance management principles.

The latest report comes after President Uhuru Kenyatta on Wednesday put on notice government officers who engage in corruption.

The government is struggling to finance its current budget, with an Sh84 billion shortfall in revenue collection targets, besides the huge foreign debt it has to service.  

AUSTERITY
This year, the National Treasury is expected to pay about Sh700 billion in short-term commercial loans borrowed from international financial institutions and governments.

Treasury Cabinet Secretary Henry Rotich is planning to slash the Sh302 billion allocated to the counties in the current financial year by between Sh15 and Sh17 billion.  

Though the county governments have protested the move, Mr Rotich has maintained that the government will only give what it has.

He has also announced austerity measures in the public sector, targeting domestic and foreign travel, hospitality and entertainment among other “unproductive” expenditure as the government seeks to bridge the revenue gap.

IRREGULARITIES
According to Mr Ouko, the accounts of Kenyatta National Hospital (KNH), National Social Security Fund, Geothermal Development Corporation, Kenya Pipeline Company, Kenya Airports Authority and Uwezo Fund are replete with anomalies and irregularities.

The others are the National Land Commission and Uwezo Fund.      

At the KNH, Sh841.4 million is reported to have been lost in a medical service contract, Sh411.8 million of which relates to the National Hospital Insurance Fund and Sh415.6 million to the free maternity programme.

The auditor has also cited anomalies in the expenditure of Sh7.7 billion in employee costs and the use of Sh500.2 million in overtime and medical allowances for the hospital’s doctors and nurses.

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