The National Treasury will be required to seek prior approval of Parliament before withdrawing and spending money from the Consolidated Fund-the government’s main account-if MPs approve changes to the law aimed at curbing abuse of Article 223 of the Constitution.
The National Assembly’s Public Accounts Committee (PAC) chairman John Mbadi has tabled a Bill that seeks to amend the Public Finance Management Act to tighten provisions governing the withdrawal of funds not approved by Parliament.
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Article 223 of the Constitution provides the leeway for the national government to spend monies that have not been appropriated by MPs if the amount appropriated for any purpose under the Appropriation Act is insufficient or a need has arisen for expenditure for a purpose for which no amount has been appropriated or money has been withdrawn from the Contingencies Fund.
“The National Treasury shall seek pre-approval to incur the expenditure from the relevant committee of the National Assembly,” says Mr Mbadi in the Bill.
“The relevant committee of the National Assembly shall consider the pre-approval request under subsection (1) within fourteen days and submit its recommendation to the National Treasury.”
Mr Mbadi said the Public Finance (Amendment) Bill, 2023 seeks to provide for a more stringent procedure for incurring urgent or unforeseen expenditure pursuant to Article 223 of the Constitution.
The proposed law comes in the wake of an inquiry into the expenditure of Sh6.2 billion that was withdrawn to facilitate the exit of Helios Investments LLP from Telkom Kenya.
The Treasury paid Sh6.2 billion four days before the August 9, 2022, General Elections. The money used to buy out Helios was withdrawn under Article 223 of the Constitution and disbursed on August 5, 2022.
Approval for the expenditure was to be done later but Parliament has now declined to rubber-stamp the deal.
The Treasury also withdrew Sh4 billion to pay maize millers who entered into contracts with the government to supply subsidised maize flour. The House has also since voted to reject the expenditure.
The Treasury had in the dying days of former President Uhuru Kenyatta’s regime approved the withdrawal of Sh53 billion from the Consolidated Fund when the country was facing a General Election.
Out of the approved funds, the Treasury withdrew Sh23 billion between the months of August to October 2022.
The Controller of Budget (CoB) Margaret Nyakang’o, who authorises withdrawals from the Consolidated Fund told the National Assembly’s Finance and Planning committee during the Telkom Kenya buyback that Article 223 has been abused by the Treasury.
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The Bill now seeks to require the Treasury to seek MPs’ nod prior to withdrawing and spending money where a need has arisen for expenditure for a purpose for which no amount has been appropriated by an Appropriation Act.
Mr Mbadi said after parliament has approved spending, an Appropriation Bill shall be introduced for the appropriation of the money spent.
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