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Truths about State spending and Treasury

Friday, September 30th, 2022 05:30 | By
Truths about State spending and Treasury

A. The amount of money in the Treasury is a mere Sh93 million.

1. Claim: A section of MPs fuelled claims that President William Ruto inherited a broke country from his predecessor, Uhuru Kenyatta. Nandi Senator Samson Cherargei was among those who claimed there was only Sh93.7 million in the Treasury.

2. Counterclaim: The government account does not work like an individual’s account; where money arrives at a destination. Money in government coffers is in constant motion; the account is merely a stopping point, not a destination.

2.1. On September 22, Cabinet Secretary Yatani clarified this situation.

2.2. Kenya’s Budget estimate for the 2022/23 financial year is at Sh 3.3 trillion. This was done with a revenue target of Sh2.4 trillion. The government, through the Treasury, uses collections done by Kenya Revenue Authority (KRA) to finance its activities, both developmental and recurrent. This revenue is collected daily, monthly and even annually.

A balance sheet showing the current account balance for the government is false since in one hour the government can raise, say, Sh270 million.

3. Counterclaim: The above charge also carries the false suggestion that the Government, under the then-President, failed in its revenue collection duties. 3.1. For context, KRA raised Sh2.03 trillion from July 2021 to June 2022.

Each day, the Government raises about Sh6.5 billion. B. State House spent Sh54 billion without Parliamentary approval.

1. Claim: A report by the Controller of Budget claims Sh54.68 billion was spent without the approval of Parliament. But the truth is that this expenditure was on services critical to the running of the country. Of the Sh54bn, only Sh21bn has been disbursed to State agencies and ministries.

2. Claim: The Government lacked the necessary approval to appropriate funds.

3. Countercheck: Article 95 of the Constitution, unambiguously, places the responsibility of budgetary oversight and approval with the National Assembly.

This means that the branches of government cannot spend funds without the approval of the Assembly. Article 223 of the Constitution allows the national government to spend money that has not been appropriated ... but for very specific reasons, ahead of approval by Parliament.

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