Next controller of budget must be gatekeeper of the public purse

President Kenyatta will shortly appoint a new occupant to the Office of the Controller of Budget to replace the retiring Mrs Agnes Odhiambo, the founding chief executive, who has stepped down after an eight-year stint.

Without a doubt, the creation of the office in 2011 marked a very significant change in our public financial management architecture. We expected this constitutionally independent body to make a big impact on management of public finances. The truth of the matter is that it hasn’t. We must raise the bar much higher while appointing Mrs Odhiambo’s successor.

I say this knowing very well that, as a society, we set very low standards for leadership. We suffer from a culture of low expectations and allow public officials to celebrate gestures in place of solid game-changing policies and reforms.

We created the Office of the Controller of Budget to play the line of last defence role over the Exchequer account and to be the gatekeeper of the government’s cash account.

We expected this office to be an important check on the exercise of discretionary powers of the National Treasury and county governments.

We wanted a truly independent office that would keep its distance from the National Treasury while working closely with governance and accountability institutions, including Parliament and the Office of the Auditor-General.

Under the ancient regime, the Treasury had imperial powers, riding roughshod over everyone in the public financial management space and monopolising functions, including writing the budget, allocating the money and releasing Exchequer resources in a system that placed it in the position of advocate, judge and jury in as far as public finances were concerned.

We introduced the Controller of Budget to de-concentrate the powers of the imperial Treasury. Yet, even as Mrs Odhiambo exits, the emperor remains standing.

Our National Treasury makes its own budget and allocates money to its own self. It does the same to other ministries, monitors its own expenditure and spending by other ministries against the budgets it has set and then conducts internal audits for itself and other ministries.

It has responsibility and oversight on procurement for all ministries and counties, runs the Ifmis financial management system for itself, ministries and country governments, and is the parent of the Internal Audit directorate, providing internal audit functions for everyone.

Still, where the Office of Controller of Budget has made no impact at all is on asserting itself over Exchequer releases and in the movement of cash out of Consolidated Fund.

The National Treasury still has a stranglehold over Exchequer releases. Is it not the height of irony that, eight years after the advent of devolution, the National Treasury even controls release of Exchequer funds to county governments?

County governments must operate within the same Ifmis environment with the national government. Why can’t we have two separate systems?

Yet the Controller of Budget is the entity with the mandate over release of funds from the Exchequer. I cannot recall an occasion when Mrs Odhiambo came out to confront the National Treasury and stopped irregular release of cash from the Exchequer.

It’s the Central Bank of Kenya that has on several occasions played the role of gatekeeper of the purse. For instance, it was the CBK that blew the whistle on the National Youth Service scam.

It’s as if the Office of the Controller of Budget had decided to relegate itself to obscurity and operate as if its most important duty was to do quarterly reports on budget execution.

Therefore, what was meant to be an independent and powerful gatekeeper of the government’s cash account — whose approval must be sought before any money can be withdrawn from it — has become a mere collector of statistics on the money that has been moved out of the Exchequer account and spent.

Make no mistake: I’m not saying that reporting is bad. The Constitution mandates the budget controller to present quarterly reports to Parliament on the execution of the budget. My point is that collation and collection of statistics was not the most important objective in the mind of the framers of the Constitution when they were creating the Office of the Controller of Budget.

Secondly, we must not forget that the National Treasury also does quarterly reports on exchequer releases and execution of the budget. This duplicative quarterly reporting is an expensive superfluity.

The bare minimum we must do is two things. First, the National Treasury must be made to drop the function of Exchequer releases. Secondly, let us introduce two Ifmis systems — for the national and county governments, respectively.