Why Treasury is under fire for budget cuts

The National Treasury is under fire for instigating budget cuts without consulting the affected state agencies.

Treasury through PS Chris Kiptoo, wants MPs to reduce this year's budget by Sh157 billion citing the withdrawal of the tax law.

Principal secretaries and accounting officers want National Assembly committees to reinstate the budgets.

The agency bosses said the cuts President William Ruto instigated to meet tax revenue shortfalls would be messy.

Planned projects, programmes and contracts would be adversely affected, the accounting officers said.

Auditor General Nancy Gathungu and Teachers Service Commission boss Nancy Macharia lamented that they were not consulted on the cuts.

“This is an indicator that the office of auditor general doesn’t have full autonomy to operate independently,” Gathungu said.

Several other accounting officers cried foul too, saying the cuts affect scheduled contractual obligations, including pending bills.

“It is confirmation that the office is under the control of the National Treasury and other authorities,” the auditor said. 

President Ruto ordered budget cuts after failing to raise Sh260 billion in new taxes. The Finance Bill, 24, originally targeted Sh344 billion.

However, following protracted protests, the tax law was dropped in its entirety.

To balance the budget, Ruto's team wants MPs to adjust this year's allocations to various ministries.

Ministries, however, raised concerns that the cuts are targeted at key operations, crucial activities and contractual obligations.

Lawmakers, just like the accounting officers, have also taken a different position from the National Treasury.

KCPE and KCSE exam invigilation cash as well as subsidy for registering students for the national exams was part of the Sh14 billion slashed from the education budget.

The construction of 770 classrooms to accommodate Grade 9 students is also in abeyance. Existing facilities are congested.

More than 153,290 first-year students placed in universities also have no budgets in the new cuts. Treasury is also eyeing cuts on HELB loans and scholarships.

Audit of public secondary schools and hospitals stands affected by Sh275 million cut on auditors' travel. There will be no auditors for TVETs.

“We have a choice of either reducing coverage or the extent of audit verifications on projects,” Gathungu said.

The Lands ministry says it can't buy Kedong Ranch to settle the landless. Budgets for digitising registers were also cut.

PS Nixon Korir said they would now process 50,000 title deeds from the planned 405,000.  Two NLC officers also risk missing Sh4.1 million gratuity.

IEBC also says it can't pay court awards (Sh401 million), presidential petition costs, and pending bills (Sh3.9 billion).

IEBC CEO Hussein Marjan said by-elections and new registration of voters are at stake.

Prisons also face challenges of producing inmates in court daily after a travel budget cut of Sh98.4 million.

PS Salome Muhia said at least 400 new probation officers will have no workstations and chairs.

Projects worth Sh823 million also risk cost overruns and litigations as contracts were already in place.

“Most of the projects were to help decongest prisons…the security threat and health risks may escalate,” she said.

Water projects also face delays after the budget for the same was decreased by Sh3.7 billion.

State House also says cuts on confidential expenditures and salaries for First Lady's staff pose serious challenges.

National Assembly departmental committees have rejected the adjustments by the Treasury. In some cases, they have demanded more money.

The education committee, for instance, have rejected the transfer of Sh3 billion school feeding programme to the ASALs department.

The committee has also recommended that Parliament restores the Sh5.1 billion for national examination invigilation.

It also wants Sh2.8 billion for JSS classrooms reinstated and the same channelled through CDF. 

The Tinderet MP Julius Melly-led committee further recommended that Sh3.1 billion meant for Tvet infrastructure be reinstated.

Treasury's bid to remove Sh1.5 billion for government-sponsored students in private universities has also been rejected.

MPs also want the Sh10 billion that was to be cut from the TSC budget reinstated and spent to cater to the CBA it is to implement this year.

The trade committee also rejected a Sh1 billion cut, saying the money be set aside for the construction of a New KCC factory in Narok.

The Labour committee also wants budgets for state departments under its watch to be approved without amendments.

They include Department of Public Service, the Public Service Commission and the Salaries and Remuneration Commission.

The Lands committee also wants the budgets reinstated citing the risk of additional expenses when contractual obligations are not honoured.