Treasury clarifies Ksh1.3 trillion irregular exchequer withdrawals
National Treasury denies claims of Ksh1.3 trillion in irregular exchequer withdrawals
National Treasury denies claims of Ksh1.3 trillion in irregular exchequer withdrawals.
Following reports that over Ksh1.3 trillion has been withdrawn from the Central Bank of Kenya by both the national and county governments in just seven months, the National Treasury has responded.
In a statement on Sunday, March 2, Chris Kiptoo, the Principal Secretary, debunked the claims stating that although the exchequer requests and withdrawals were not automated by the end of the 2023/2024 financial year, strict legal and financial procedures were followed.
“A section of the media has today published a report suggesting irregularities in Exchequer withdrawals, particularly claims of a Ksh1.3 trillion withdrawal over seven months. While we await the official report from the Controller of Budget, The National Treasury wishes to clarify the facts,” part of the statement read.
“Until the end of the 2023/24 financial year, Exchequer requests and withdrawals were processed manually, as the system had not yet been automated. However, all withdrawals followed strict legal and financial procedures, with every transaction subject to review and approval by the Controller of Budget, ensuring full compliance with public finance regulations.”
PS Kiptoo further clarified that beginning July 1, a major reform was launched in collaboration with the CBK and the Controller of Budget (CoB) to automate the exchequer process.
This, he stated, was in a bid to enhance efficiency, reduce processing time, improve accountability, and strengthen financial oversight.
As a result, all national government Ministries, Departments, and Agencies (MDAs) were successfully transitioned into this automated system where the CoB has to approve the exchequer requests digitally.
However, not all of these transactions were transitioned due to their distinctive approval process. They include debt payments, transfers to Counties, the Judiciary Fund, and the Equalisation Fund. The process to onboard them is underway.
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Despite this, however, the PS noted that even transactions made manually were heavily monitored and left no room for any disgressions.
“The National Treasury categorically affirms that all Exchequer withdrawals, whether processed manually or electronically, are subject to strict legal and financial oversight,” part of the statement read.
“Controller of Budget, ensuring full compliance with public finance regulations. At no point has public money been lost or misappropriated through this process.”
The statement ended with a promise to compile a more comprehensive response once the official report from the Controller of Budget was availed.
In the Daily Nation issue of February 2, an exclusive report claimed that both governments manually requested over Ksh1.3 trillion to pay debt, pensions, and other expenditures, bypassing the automated system.
According to the report, this information was obtained from a confidential CoB report to the National Assembly Committee on Finance and National Planning.
Reportedly, these transactions were made between July 12, 2024 and February 2025.
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