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"id": 232505,
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"speaker_name": "Mr. Billow",
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"content": "I would be happy if the Chairman of the PAC gives the Minister time to listen because discretion by the Minister for Finance is one of the major issues. I want to give one example from this book. When the then Minister for Finance gave a discretion to waive tax amounting to UK£533 million to the then Kenya Posts and Telecommunications--- The Controller and Auditor- General is complaining. It is true it was a Government company but when it was split, one arm of it was sold to a private company called Vodafone, which is today one of the most profitable companies, but for that company to be sold the Controller and Auditor-General said: \"The Minister for Finance, without approval from this House, gave a waiver of UK£533 million in outstanding Value Added Tax (VAT). That is Kshs11 billion of VAT that was written off through a discretion by a Minister without approval and the Controller and Auditor-General says that: \"He did not take any action to pursue other avenues for recovery of that tax, neither did he seek the authority of this House\". To-date, the Controller and Auditor-General has been seeking the Government to regularise that anomaly by getting approval from this House. Those are the kinds of problems that we continue facing. Mr. Temporary Deputy Speaker, Sir, coming to the loans, in the statement of loans issued-- November 29, 2006 PARLIAMENTARY DEBATES 4065 - In other words, the Controller and Auditor-General says that: \"The statement of loans issued through 12 Ministries amounted to UK£2 billion or Kshs20 billion of which only 12 per cent was ultimately repaid during the year by those Ministries\". His argument is that apart from the fact that these loans are not regularised through Parliament and they are given through the backdoor, these loanees cannot be traced. I want to say that there are many people, some of whom are now Members of Parliament I understand who have been beneficiaries of Government loans after getting securities and guarantees from the Government. Today, they are some of the wealthiest people and the same people today who say it is the former regime to blame. These are the same people who have been doing these things since 1960s, 1970s and 1980s. They have been collecting loans and that is why the Controller and Auditor-General says those loans do not make sense and they are fictitious. Mr. Temporary Deputy Speaker, Sir, the excesses of the Government, that is the amounts of money that these people over-spent, is one of the major challenges when you go through the PAC Report. The Treasury, which is responsible for oversight and controlling public expenditure, always seems to be helpless. Indeed, they are not helpless. Treasury has powers. They appoint the Accounting Officer. If an Accounting Officer over-spends more than what has been allocated, the Treasury has powers to revoke his appointment as an Accounting Officer, an action that has rarely been exercised by the Treasury in this country. Consequently, we see a situation where an Accounting Officer can spend as much as he wants and the consequence is the billions that we end up with every year known as pending bills. The Controller and Auditor-General says: \"The total value of the pending bills is UK£18 billion, that is Kshs360 billion. It represents 63 per cent of our Gross Domestic Product (GDP); that is the total public debt. However, on the pending bills the total value as at the time we audited this, according to the Controller and Auditor-General, was UK£42 million which is Kshs8 billion and it is \"growing\" to today. The reason is because of that failure by Treasury to exercise its powers. We want to call on the Treasury today, even as we speak, because the same problems are there in today's accounts that we are looking at. Treasury must exercise its powers! If an officer over-spends without authority and goes beyond what has been allocated, you have powers to withdraw his appointment as an Accounting Officer. You have powers, in fact, under the Financial Management Act to even discipline that officer. That is not the case and you can guess which is the most notorious department of the Government in this regard; it is the Department of Defence (DOD). Forget about the Anglo Leasing of today. There was a time the DOD had pending bills of over Kshs2.2 billion in 1998/1999 Financial Year and yet there has been no authority absolutely from this House for that money to be spent before allocation. Mr. Temporary Deputy Speaker, Sir, let me come to my last three or four points on the Treasury. In 1998/1999, Treasury endorsed and allowed the National Bank of Kenya (NBK) to over-draw Kshs2.47 billion from the account of the CBK. Listen to this: In the same year, Treasury again allowed CBK to advance Kshs2 billion to NBK. Why is the Government giving Kshs4.47 billion to the NBK? The reasons are very clear. According to the Controller and Auditor-General, this money is being given in order to write off non-performing loans. This House did not give approval of allocation or transfer of that money. It is a backdoor way of paying out money without the approval of Parliament and yet these are non- performing loans by tycoons, Ministers, Members of Parliament, companies and so forth. So, we tax our people on their kerosene, little glass of water and we allow the rich people, who can afford to pay their debts, to have their loans written off by the stroke of the pen by the Minister in the Treasury. This House does not get to approve such loans. Action was recommended on this by the Controller and Auditor-General and the PAC. 4066 PARLIAMENTARY DEBATES November 29, 2006 Our recommendations is to this Ministry and the others in the Government to take action because no action has been taken to date, including even getting approvals from Parliament to pay out this money. Mr. Temporary Deputy Speaker, Sir, you do not take money from the Central Bank of Kenya (CBK) and, straightaway, ask the CBK: \"Can you credit the account of the National Bank of Kenya?\" That is illegal. If that Kshs2 billion was dividends to the Government of the Republic of Kenya, the Constitution requires, under Section 99, that the Kshs2 billion must, first, be accounted for as Consolidated Fund money. Only after it has been accounted for as revenue in the Consolidated Fund, can the Treasury disburse it through this House. It is for that simple reason of the Government's failure to seek parliamentary approval that, up-to now, that amount continues to be reflected here as an audit query. Subsequently, the Kshs2 billion or the hundred---"
}