Shock as it emerges that State Agencies may have ‘looted’ a whopping Sh400 billion – Look! No wonder RUTO has been unable to turn around the economy

 Wednesday, July 31, 2024 – Parliament has revealed disturbing news in the management of State agencies in Kenya.

This is after it emerged that State agencies may have misappropriated a whopping Ksh400 billion collected annually in fees for government services.

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 now put State agencies under the microscope to push for greater transparency and accountability in managing the money.

The committee has proposed changes to the laws governing ministerial appropriations-in-aid (A-I-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 is revenue 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.

This pattern of underreporting has raised alarms over the accountability and proper use of A-I-A funds, which are essentially taxpayer money.

The Budget and Appropriations Committee has demanded that the National Treasury prepare and submit a detailed report by December, outlining the sources and expenditures 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.