The Treasury’s decision to cut funding to various government departments in the current fiscal year is illegal, the Commission on Administrative Justice (the Ombudsman) has said, insisting that such moves are in breach of the Constitution and must be reversed.
The advisory came in the wake of the Treasury’s July 12, 2016 circular that outlined funding cuts to government departments ostensibly to rationalise spending.
In an opinion delivered in response to a petition on the Treasury’s action, the Ombudsman said there is no legal basis for such actions, which amount to usurping Parliament’s role in appropriation of public funds.
“It bears restating that Parliament is the sole authority for appropriation of funds for expenditure. The National Treasury does not have such a mandate or powers,” the CAJ wrote in a letter to Treasury secretary Henry Rotich dated October 10.
“While the National Treasury can prescribe measures for administration of public finance, the same does not extend to approval of expenditure.”
The Ombudsman is tasked with addressing all forms of maladministration and to investigate abuse of power by both public and private entities.
The commission says the Treasury’s action, if left to stand, will make nonsense the budgetary process as provided for in the Constitution and the Public Finance Management Act, whose intention was to remove executive control of public resources.
The 2010 Constitution requires the Treasury to consult ministries and other government agencies before preparing budget estimates that set ceilings for every public entity.
The estimates are then forwarded to Parliament, which approves the proposals, making adjustments as it sees fit.
Once the budget is approved, the Treasury is expected to disburse the funds to the respective public entities according to their entitlement.
Any alteration to the disbursements must again be sanctioned by Parliament, the Ombudsman said.
The Treasury has in the recent past unilaterally cut disbursements to government ministries besides withholding funding to some public entities, effectively breaking the law.
“An examination of the circular No. 13/2016 clearly shows an attempt by the National Treasury to circumvent the Constitution thereby undermining the role of Parliament in the budgeting process,” the Ombudsman said.
The fact that the circular was issued 12 days into the current fiscal year may indicate a malevolent intent to undermine the budget system, the CAJ stated.
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Credit: Business Daily