COB, MPs accuse Treasury of evading House in funds approvals

Controller of Budget Margaret Nyakang’o has faulted the State for its continued over-reliance on Article 223 of the Constitution to finance existing government programmes.

In her latest report, Nyakang’o revealed that in the 2024/2025 financial year, the National Treasury approved a total of Sh77.48 billion in additional funding for Ministries, Departments and Agencies under Article 223.

Of this amount, the Controller of Budget authorised withdrawals of Sh66.54 billion from the Consolidated Fund.

Through the National Government Budget Implementation Review Report for the 2024/2025 financial year, Nyakang’o cautioned that relying too heavily on Article 223 to implement ongoing government programmes violates Paragraph 40 (4) of the Public Finance Management (National Government) Regulations, 2015.

She further noted that this practice points to possible shortcomings in budget formulation and weaknesses within the overall budgeting cycle.

“Scrutiny of the approvals revealed several instances where additional funding was required to support existing government programmes, which should have been anticipated during budget formulation,” the report notes in part.

For example, in the last financial year, the State Department for Roads, the State Department for Broadcasting and Telecommunications, and the State Department for Higher Education and Research received extra allocations under Article 223 to clear outstanding pending bills.

Additionally, the State Department for Public Health and Professional Standards was allocated Sh1.75 billion to settle salary arrears owed to medical doctors under the 2017–2021 Collective Bargaining Agreement.

“The government should adopt good planning, better budget practices and sound expenditure management by prioritizing all essential services and aligning them to operational realities during the budget formulation and implementation,” she says. Article 223 of the Constitution states that the national government may spend money that has not been appropriated if the amount appropriated for any purpose under the Appropriation Act is insufficient, a need has arisen for expenditure for a purpose for which that Act has appropriated no amount; or money has been withdrawn from the Contingencies Fund.

Further, Article 223(2) requires that the expenditure is later approved by Parliament after the first withdrawal of money within two months, and if Parliament is not sitting, then within two weeks of its next scheduled sitting. 

Upon approval, expenditure under Article 223 of the Constitution must be included in an Appropriation Bill.

However, Article 223(5) stipulates that such spending should not exceed 10 per cent of the amount appropriated for the year, unless Parliament approves a higher percentage in exceptional circumstances. Regulation 40(3) of the Public Finance Management (National Government) Regulations reinforces that Article 223 funds may only be used for unforeseen or unavoidable circumstances, or where existing budget provisions are inadequate.

Government spending without prior parliamentary approval has long been contentious, attracting concerns from both the National Assembly and the International Monetary Fund (IMF).

In April 2023, the National Assembly’s Public Accounts Committee (PAC) requested the Auditor General to conduct a special audit of all Article 223 expenditure for the 2022/2023 financial year. This followed alarm over Sh130 billion spent under the provision, which audits later revised to Sh147 billion.

The funds covered subsidies for fuel, flour, fertilizer, relief food, and enhanced security operations. A controversial Sh6 billion was also spent to purchase a 60 per cent stake in Telkom Kenya from Helios Investment Partners, temporarily returning the telco to government ownership before the deal was reversed in 2023 following public outcry.

The IMF had earlier mandated similar audits as part of the Extended Credit Facility Programme, requiring a review of supplementary budget expenditure over three years, including Article 223 withdrawals.

The audits aimed to improve accountability, transparency, and risk management in government spending.A 2023 Auditor General report analyzing nine years of Treasury data highlighted a rising trend in Article 223 funding. Requests grew from Sh1.1 billion in 2014/15 to Sh147.39 billion in 2022/23—a 13,299 per cent increase.

Supplementary budgets have become increasingly common, initially limited to two per year, but more recently expanded to three.

The Auditor General also flagged inconsistencies in how Ministries, Departments, and Agencies (MDAs) reported expenditure to Parliament, with some approved amounts not disclosed. Records revealed that MDAs sometimes spent above the amounts sanctioned under Article 223.

Saboti MP Caleb Amisi criticized the Treasury and the executive for allegedly misusing Article 223 to bypass parliamentary oversight.

“Funds meant for emergencies are being spent on routine projects, such as building onstruction,” he said, arguing that the provision has been repeatedly abused under President Ruto without corrective action. Amisi proposed amending the Constitution to remove the Article altogether.

Benard Muchere, a fraud risk consultant and former National Treasury auditor, echoed the criticism, describing how supplementary budgets were effectively treated as new full budgets—an unconstitutional practice.

Last year, three supplementary budgets were introduced: July 2024’s Supplementary Estimates No. 1 reduced ministerial expenditure by Sh156.4 billion; February 2025’s Supplementary Estimates No. II approved Sh34 billion under Article 223 for specific needs; and June 2025’s Supplementary Estimates No. III proposed a net increase of Sh35.7 billion, raising total expenditure to Sh4,007.5 billion.

Muchere emphasized that Article 223 should only respond to genuine emergencies, such as life-threatening outbreaks like Ebola, which cannot wait for the annual budget. He questioned whether domestic travel under the President’s office could be deemed “unavoidable,” arguing that the Treasury has repeatedly circumvented the law.

Muchere advocates for a more knowledgeable Parliament to curb misuse, asserting that proper legislative oversight would prevent illegal expenditures without chasing the executive.

Busia Senator Okiya Omtatah also criticised the government for exploiting Article 223 as a conduit for misappropriation. “The provision allows only one supplementary budget, yet multiple are passed each year,” he said.