The National Treasury has moved swiftly to dispel allegations of irregularities in Exchequer withdrawals, following a media report claiming that Ksh 1.3 trillion was withdrawn over a seven-month period.
The report, published by a section of the media on Sunday, has raised questions about the management of public funds, prompting an official clarification from the Treasury as the nation awaits a detailed report from the Controller of Budget (CoB).
In a statement released today, the Treasury dismissed any suggestion of financial impropriety, asserting that all Exchequer withdrawals adhered to strict legal and financial procedures.
“Every transaction is subject to review and approval by the Controller of Budget, ensuring full compliance with public finance regulations,” the statement read. “At no point has public money been lost or misappropriated through this process.”
The Treasury explained that until the end of the 2023/24 financial year, Exchequer requests and withdrawals were processed manually due to the absence of an automated system. However, it emphasized that even under the manual system, robust oversight mechanisms were in place to safeguard public resources.
A significant shift occurred on July 1, 2024, when the Treasury, in partnership with the Central Bank of Kenya (CBK) and the CoB, launched a landmark reform to automate the Exchequer process.
This initiative, aimed at enhancing efficiency, accountability, and transparency, has seen all National Government Ministries, Departments, and Agencies (MDAs) successfully onboarded onto the digital platform. Exchequer requests and approvals by the CoB are now processed electronically, marking a major step forward in financial management.
However, the Treasury noted that certain transactions—such as debt payments, transfers to Counties, the Judiciary Fund, and the Equalisation Fund—were excluded from the first phase of automation due to their unique approval processes.
Integration of these transactions into the automated system is ongoing, with full automation expected by the close of the 2024/25 financial year.
The media report alleging a Ksh 1.3 trillion withdrawal has sparked public debate, with some questioning the timing and scale of the transactions. While the Treasury did not directly address the specific figure in its statement, it reiterated that all withdrawals, whether manual or electronic, are rigorously scrutinized.
“The National Treasury categorically affirms that due diligence and legal oversight have been upheld in every instance,” the statement added.
As speculation mounts, the Treasury has promised a comprehensive response once it receives the official report from the Controller of Budget. “We remain committed to transparency, prudent financial management, and safeguarding public resources in line with our mandate,” the statement concluded.
The automation of the Exchequer process has been hailed as a critical reform in Kenya’s public finance system, with analysts noting that it could significantly reduce processing times and enhance accountability. However, the transition has not been without challenges, particularly regarding the phased inclusion of complex transactions like debt servicing and inter-governmental transfers.
For now, Kenyans await the CoB’s report for further clarity on the alleged Ksh 1.3 trillion withdrawals. Until then, the Treasury’s assurances of compliance and transparency will be put to the test as public scrutiny intensifies.
