Austerity a mirage, as Jubilee spends Sh12 billion on trips

A new report reveals the Jubilee administration's unbridled spending on non-essentials in what paints a gloomy picture of the country's development prospects.

The budget implementation review report of the office of Controller of Budget Agnes Odhiambo shows more than three-quarters of the total revenue raised in the first nine months of the 2018-2019 financial year went to recurrent expenditure.

The report dated May 2019 indicates that of the Sh1.7 trillion government expenditure between June- March 2019, recurrent expenditure stood at Sh1.3 trillion. Only a paltry Sh395 billion was left for development.

State departments and agencies gobbled up Sh3.9 billion on hospitality, which includes offering refreshments and entertainment for guests visiting government offices.

President Uhuru Kenyatta's government, which appears to be on a spending spree, frittered away nearly Sh12 billion on both local and foreign trips during the first nine months of the 2018-2019 fiscal period.

Foreign trips have been cited as avenues for public servants to pocket fat allowances, with Auditor General Edward Ouko often accusing some of them of failing to account for imprests amounting to billions of shillings.

The Presidency, which brings together the Office of the President and the Deputy President, splurged out Sh758 million on hospitality during the period.

Despite warnings of a ballooning public wage bill and concerns over wasteful spending by state agencies, the government splurged Sh7.7 billion on local travel and Sh4.2 billion on globetrotting officials.

Comparatively, the government spent Sh5.5 billion on domestic travel and Sh3 billion on foreign trips in the same period in the 2017-2018 financial year.

The state had also spent Sh 3.7 billion on hospitality during the same period, meaning it spent more in the period under review despite promises of austerity.

The massive spending on items considered nonessential flies in the face of President Uhuru's public pronouncements last September that his administration would embrace frugality.

The President had said drastic budget cuts on hospitality, foreign and domestic travel, training and other less essential spending to bridge the widening deficit between revenue and expenditure.

He insisted that state officials must embrace cost cutting measures and channel more money towards development rather that recurrent expenditure.

However, despite the President's tough talk on wide-ranging budget cuts, the figures from the report reveal a stark contrast..

Travel expenditures went up by Sh3.2 billion while hospitality costs hiked by Sh200 million in a blistering indictment of the government that is adamant on nonessential spending despite grumbling from overtaxed Kenyans.

According to the Controller of Budget report the Interior led in hospitality expenditure, forking out Sh1.08 billion on refreshment and entertainment of guests.

This means that the Fred Matiang'i-led ministry beat the Presidency, which expended Sh758 million on the same budget line.

The Department for Interior also spent Sh81.5 million on foreign travel, almost half of the Presidency's Sh190.6 billion overseas trips budget.

Foreign Affairs, which one would expect to have spent an almost equal amount because of foreign visitors came in third, spending Sh357 million.

Interior further spent Sh1.3 billion on domestic travel but it was nothing compared to the National Assembly.

The House which has been in the eye of a public storm over unbridled expenditures and insatiable appetite for more allowances gobbled up Sh2.2 billion on domestic travel and Sh1.1 billion on foreign travel.

According to the report, the Parliamentary Service Commission spent Sh1.03 billion on domestic travel and a further Sh699 million on foreign trips in  the same period.

Overall, domestic travel expenditure recorded the highest payments at Sh7.7 billion for all ministries, departments and agencies.

“This was followed by Sh5.4 billion on rentals and rates for non-residential buildings, Sh4.2 billion on foreign travel, and Sh3.9 billion on hospitality,” the report says.

Foreign Affairs spent Sh1.9 billion on rentals and rates for non-residential buildings.

The total recurrent expenditure allocation for ministries, departments and agencies in the 2018-2019 financial year amounted to Sh1.1 trillion.

During the first nine months of the year, a total of Sh720 billion was spent on recurrent expenditure, which represents 67.7 per cent of the revised gross recurrent estimates.

A further Sh 584.2 billion was spent on Consolidated Fund services during the same period.

As it is usually the case, government ministries, departments and agencies may have gone out of their way to spend the remaining funds allocated to them to beat the June 30 close of the financial year to avoid budget cuts in the following year.

Spending on domestic travel and hospitality among other areas is usually modest during the first months of the financial year but skyrockets as the year comes to an end.

The gross budget for the 2018-2019 financial year amounted to Sh3 trillion and comprised of Sh2 trillion for recurrent expenditure, Sh650.6 billion for development expenditure and Sh314 billion to county governments as equitable share of the national revenue.

“The gross development expenditure during the nine months amounted to Sh395.3 billion, which was an increase of 39.8 per cent compared to Sh282.6 billion recorded in a similar period in 2017-2018 financial year,” the report says.

Compensation to employees included basic salaries for permanent employees, basic wages for temporary employees, personal allowances paid as part of salary, employer contributions to compulsory national social security schemes and employer contributions to compulsory health insurance schemes.

The total amount spent under this category was Sh294.7 billion.

However, this amount does not include expenditure by the National Intelligence Service, Ethics and Anti-Corruption Commission and payments to the military under the Ministry of Defence.

The highest spending MDA was Teachers Service Commission at Sh177.9 billion representing 60.4 per cent of the total expenditure on personnel emoluments.

“Overall, domestic travel expenditure recorded the highest payments at Sh7.7 billion. This was followed by Sh5.4 billion on rentals and rates for non-residential buildings, Sh4.2 billion on foreign travel and Sh3.9 billion on hospitality,” the report adds.

In the first nine months of FY 2018-19, implementation of the budget faced some challenges which slowed down execution of planned activities, according to Odhiambo.

 The challenges included delay in submission of financial and non-financial reports to the office of the Controller of Budget by accounting officers, which affected timely reporting and consequently, oversight by various stakeholders.

"Failure to align budget re-allocation to actual performances in supplementary budget led to reduction of some budget items below the level of expenditure already incurred," she said.