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"id": 253595,
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"speaker_name": "Mr. Kimunya",
"speaker_title": "The Minister for Finance",
"speaker": {
"id": 174,
"legal_name": "Amos Muhinga Kimunya",
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"content": " Thank you, Mr. Deputy Speaker, Sir. Let me start by recognising the work that has been done by the PAC on the Anglo Leasing issue, and also recognise the contribution by hon. Members in this House. There is renewed commitment to fight corruption of the past, present and hopefully, there will be no more in the future. In the course of our Debate, I looked at the issues that were raised, that may give the wrong impression on exactly what was supposed to have happened at the Treasury, and may not, therefore, give the right impression when the report is read by the future generations. 500 PARLIAMENTARY DEBATES April 18, 2006 The issues that relate to the Treasury, and which were raised in the PAC report were well covered in a written submission which was passed to the Committee by the Treasury. However, despite that, there are some observations that have been made, which I would like to clarify for the record. One of the observations by the PAC has been that the Treasury did not give stopping instructions for the security contracts and the payments went on. That has come out even in the course of today. I wish to clarify for the record that, indeed, the Treasury stopped payments on the contracts which are covered within the 18 contracts. As of now, there are arrears amounting to Kshs14 billion, which have not yet been paid. It is true that there were two payments which were made after the stoppage of the payments between November 2004 and April 2005, which His Excellency the Vice-President and Minister for Home Affairs mentioned. Apart from those two exceptional payments which were made due to the threat of stoppage of the postal system and the immobilisation of the telecommunications system in the country, all the other payments have actually been stopped. The other observation that was made was that the Treasury needed to give some form of payment instruction to the Central Bank of Kenya. For the benefit of hon. Members and for future generations, the procedures that we use for external debt payment are as follows: Allow me to refer to them for proper sequence. The first thing that happens is that a demand notice is received at the Treasury from a creditor. The next step is that the Public Debt Section, the Public Debt Department confirms that the amount is due, as per the loan agreement signed by the Government and the creditor. The third step is that a payment advice is prepared and signed by two authorised signatories at the Treasury. The fourth step is that the advice is forwarded to the Permanent Secretary, Treasury, who is the final signatory. Finally, the final advice is submitted by the Treasury to the Central Bank for payment. Until the payment advice is submitted to the Central Bank of Kenya for payment, the CBK has no basis of making any payments. Even if we say that the Treasury did not issue instructions to the Central Bank of Kenya to stop payments, that issue is superfluous. We do not need to issue stop-payments when we have not been issued with a payment advice. That needs to be appreciated and when you are reading the report in the future, that concept needs to be corrected. The other observation that was made and is contained in the report is that the Treasury had delayed the submission of the report by the Controller and Auditor-General to Parliament. The impression created is that the Controller and Auditor-General carried out an audit and the Treasury delayed in submitting it to this House. For the record, and as hon. Mwiraria said, the special audit was initiated by the Treasury in a letter dated 12th August, 2004, which was signed by the Permanent Secretary, to the Controller and Auditor-General, specifically to help the Treasury in determining which of the 18 contracts was due for payment. It was a specific report demanded by the Treasury. In the process, the Controller and Auditor-General called for evidence from the Accounting Officers. Some gave evidence while some did not give the information. In the process, there was a delay in the finalisation of the report."
}