The National Treasury has denied reports of irregularities in Exchequer withdrawals, assuring the public of strict oversight procedures followed.

This follows reports by the media that the National and county governments had made irregular withdrawals of Sh 1.3 trillion from the Central Bank of Kenya in just seven months.

In response, the Principal Secretary, Chris Kiptoo, refuted the claims, stating that although the exchequer requests and withdrawals were not automated by the end of the 2023/2024 financial year, strict procedures were still followed.

“While we await the official report from the Controller of Budget, The National Treasury wishes to clarify the facts that 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,” stated Kiptoo on March 2.

PS Kiptoo cited a reform initiative launched last year in collaboration with the CBK and the Controller of Budget (CoB) to automate the exchequer process.

Following the initiative, all national government Ministries, Departments, and Agencies (MDAs) are successfully transitioned into the automated system where the CoB has to approve the exchequer requests digitally.

 However, transactions for debt payments, transfers to Counties, the Judiciary Fund, and the Equalisation Fund were not included in the first phase of automation due to their distinctive approval process.

The full integration of the transactions into the automated system is expected to be complete by the end of 2024/2025 financial year.

PS Kiptoo assured the public that “The National Treasury categorically affirms that all Exchequer withdrawals, whether processed manually or electronically, are subject to strict legal and financial oversight. Controller of Budget, ensuring full compliance with public finance regulations. At no point has public money been lost or misappropriated through this process.”

The treasury was responding to an article by a local publication yesterday that claimed that both governments manually requested over Sh1.3 trillion to pay debt, pensions, and other expenditures, bypassing the automated system.