The Machakos Court has decreed that parliament must create legislation requiring transparency and accountability from all private organizations that receive government funding.
Justice Francis Rayola Olei indicated that any private organization utilizing public funds or state resources should be aware of their accountability. they must describe how they utilize it.
He stated that a proclamation should be made and is now enacted, stating that every private organization receiving public money and additional governmental assets must provide an accounting to the general populace regarding the utilization of these resources via relevant laws to be established by Parliament.
The ruling made by the court originates from a lawsuit submitted by Paul Lihanda in May 2023 against the East African Development Bank, CS Finance, the Central Bank of Kenya, and additional entities.
In his legal documents, Lihanda requested numerous declarations and orders targeting both the Bank and the CS.
His primary argument was based on Section 2(1) of the EADB Act, which mandates that the Kenyan government must cover expenses from the consolidated fund without requiring additional parliamentary approval.
He stated that this gave CS Finance exclusive authority to handle public funds, free from Parliamentary supervision and accountability. This arrangement, he argued, contradicts the tenets of sound governance and transparency.
He requested the intervention of the court, stating that the procedure lacked openness and fairness since the legislation does not permit Parliament to adequately scrutinize these actions.
Moreover, Lihanda also pointed out that the legislation governing Kenya’s approach to the regional bank was amended without adequately verifying whether these alterations complied with constitutional requirements.
He mentioned that the public had no part in the decision-making process.
However, the CS Finance, CS Foreign Affairs, and the Attorney General maintained their stance, stating that the monies transferred to the regional bank from the consolidated funds areovernighted by the Public Debt and Privatization Committee.
However, the judge rejected their argument in his ruling, stating that it lacked factual basis.
As pointed out by Judge, consolidated fund services are obligatory expenses, which encompass debt repayments, pension payments, and salaries for constitutional officeholders funded through these consolidated funds. This also includes advances made to EADB.
He agreed with Lihanda that a part of the EADB Act unfairly gives CS Finance exclusive authority to manage and distribute public funds from the consolidated fund, bypassing parliamentary scrutiny.
"The remarks go against the tenets of public finance and the standards of proper governance," stated the judge.
The judge ruled that the method through which CS Finance taps into the consolidated fund to meet its duties to the EADB goes against fundamental constitutional tenets.
He highlighted that the present setup does not have adequate safeguards, specifically as outlined in sections 2(1) and (2) of the EADB Act, governing fund distribution.
The court emphasized that without adequate supervision, the funding procedure might result in the misuse of public money.
To conclude, the judge gave instructions for CS Finance to provide documentation of every payment transferred from the consolidated fund to EADB between 2014 and now.
He mentioned that the information ought to be presented to Parliament within the upcoming 60 days.
At the same moment, the court declared Section 2 of the EADB Act as unconstitutional; however, it also postponed this ruling for one year. This delay was intended to provide Parliament and the Attorney General with sufficient time to contemplate and propose suitable revisions to the EADB Act.
0 Comments