How 600 Billion Is Misused In A Single Government Financial Year and How To Avoid Recurrence.

A budget is a very important document in the calendar of any government as it identifies the important projects that the government will prioritize and spend on them and where the revenue to fund these projects will come from. This, therefore, makes the budget-making process an important aspect of our financial lives as individuals, firms, and the government. In the last few years, there has been a concern about how post-budget misuse of public funds is perpetuated and becoming entrenched in the overall budget-making process.

For instance, non-priority projects will be budgeted for during the process and funds will be misused during the post-budget implementation. In fact, the office of the auditor general has previously intimated that about 600billion are misused during a single government financial year. The president once also acknowledged that about 2billiob of the public fund is misused every day translating to about 700billion. With this in mind, it is important to come up with tangible solutions for these challenges and this can only happen by sealing the loopholes in the budget-making process stages that leave loopholes for post-budget misuse of public funds.

First, the budget planning and formulation stage builds on the previous year’s budget in which no proper budget audit reports of the previous years have been created. This means that the budget is built without clear information about the real outcome of the budgeted revenue and as such it’s very easy to continue allocating money to fictitious projects. Second, because of the lack of proper checks and balances, it’s easy to include fake projects in the budget estimates. To solve this problem the treasury should adopt a zero budget system which will make it easier to justify many of the budget estimates from government ministries and departments.

Second, the role of the parliament is to allocate and approve the budgeted estimates in the form of a budget policy statement. This stage has its own challenges as the time allocated for the parliament to carry out the exercise is limited to critically scrutinize the budget policy statement. Second, sometimes the executive will influence the process through party politics as it happened during the debate on the inclusion of VAT in the finance bill 2018. Lastly, parliamentarians alter the budget statement by allocating funds to their own projects such as CDF and parliamentary service commission without creating additional sources of revenue hence increasing budget deficits.

Third, the budget implementation stage has its fair share of problems as the Public accounting committee (PAC) and public investment committee (PIC) which are supposed to be the watchdogs during implementation are not very transparent and efficient in their role due to delays by the controller of budget and the auditor general to furnish them with budget evaluation reports in time. This makes it impossible for the watchdog committees to effectively offer timely reports on how government funds are being implemented.

Lastly, the budget evaluation stage spearheaded by the office of the auditor general and the controller of the budget has its own shortcomings. For example, the two important independent bodies lack adequate staffing and funding to carry out their mandate effectively especially now when they have expanded their role of auditing and scrutinizing the budgets for all the counties. This has its own predicaments of delayed audit reports that causes overall delays in other processes, lack of transparency, and lack of correct information to formulate forthcoming budgets.

In conclusion, the budget-making process must be relooked afresh if we have to tame the post-budget misuse of public funds.

Dr. Kabata is an Economics and innovation lecturer at Kirinyaga University.

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