State agencies are under the microscope as lawmakers push for greater transparency and accountability in the management of approximately Ksh400 billion collected annually in fees for government services.....CLICK HERE TO READ THE FULL ARTICLE>>>
A recent report tabled in the National Assembly by the Budget and Appropriations Committee has highlighted significant concerns over the current handling of these funds.
The committee, chaired by Kiharu MP Ndindi Nyoro, has proposed changes to the laws governing ministerial appropriations-in-aid (Ai-A) in a bid to curb the trend of underestimating revenue during budget preparations. This practice often leads to agencies increasing their targets later in the financial year, compromising fiscal accountability and prudence.
Ministerial A-i-A are revenues generated by various government ministries, departments, and agencies from services provided, which are then spent at the source after legislative approval. Among these receipts are the Road Maintenance Levy, the Railway Development Levy, the Housing Levy, the Petroleum Development Levy, and University Fees.
“The Committee noted with concern that Appropriations in Aid constitute a substantial component of national government financing, amounting to approximately Ksh400 billion in the proposed estimates for FY 2024/25. However, agencies tasked with collecting the A-i-A consistently underestimate their targets during budget approval, only to seek upward revisions during supplementary estimates,” the report states.
This pattern of underreporting has raised alarms over the accountability and proper use of A-i-A funds, which are essentially taxpayer money. The Treasury has yet to officially release the revenue figures for A-i-A for the year ending June 2024.
However, data for the nine months through March indicates collections of Ksh332.66 billion against a target of Ksh285.68 billion, marking an over-performance of Ksh46.98 billion.
The Budget and Appropriations Committee has demanded that the National Treasury prepare and submit a detailed report by December, outlining the sources and expenditure of all A-i-A for the national government, broken down by ministry, department, and agency.
The report should also include practical proposals for revising the legal frameworks governing the collection and utilisation of these funds to ensure a cohesive regulatory approach.
“The underestimation of A-i-A during budget approval exacerbates the budget deficit, leading to increased borrowing,” the committee warned. This scrutiny comes as President William Ruto’s administration intensifies its focus on the financial activities of commercial State Corporations and Semi-Autonomous Government Agencies (SAGAs).
Leaders of prominent SAGAs, such as the Communications Authority of Kenya, the Capital Markets Authority, and the Central Bank of Kenya, have been instructed to remit up to 90 per cent of their surplus funds.
Similarly, commercial entities are required to transfer 80 per cent of their net profits...CONTINUE READING>>
