Nairobi — Treasury has limited each of the 42 ministries to spending Sh700,000 a week, The Star has learnt.

In an apparent move to stop conspicuous consumption and plug the hole left in the Free Primary Education funds by donors due to corruption in the Education ministry, Treasury issued the directive on January 1, 2010.

The directive is contained in the circular, REF: AG17/01 vol 0 (164) signed by a Mr M Gatimu on behalf of Ministry of Finance PS Joseph Kinyua.

According to the circular seen by The Star, Treasury will also wire all salaries for civil servants to their accounts starting January 31.

The circular limits ministries to withdrawing only Sh700,000 a week from Central Bank for office use. This includes office expenditure, allowances, travel expenses, recurrent expenditure, fuel, etc.

This does not affect normal procurement, the circular clarifies.

A ministry official, who did not want to be identified due to the sensitivity of the issue, quipped that the government "might grind to a halt in six days".

"This in effect means that most ministries will grind to a halt in a matter of days. Can you imagine OP functioning on 700,000 a week? " posed the ministry official.

The Ministry of Education with the largest vote of Sh116 billion will find it difficult to operate.

General administration and planning alone adds to Sh101 billion this financial year.

The budget minus salaries overruns the amounts set by Treasury per week.

Another official pointed out that FPE funds have put a squeeze on the government.

"The government has to find the money to hold the programme and it has taken a huge chunk of their cash. Solution? Slow down consumption from all ministries until they can recover," stated the ministry official.

Last week, the government said it had released Sh1.7 billion for the first term and is scheduled to release another Sh1.6 billion despite donors withholding funds due to corruption that led to the loss of billions of shillings over the last three years.

According to 2008/2009 FPE financial year budget, donors funded FPE to the tune of Sh2.2 billion out of Sh3.3 billion that sustains the programme.

Of the Sh2.2 billion, Britain spent Sh218 million, Denmark Sh308 million, Canada Sh89 million, Unicef Sh3.7 million and Sh1.6 billion from a group of donors known as Fast Tracking Initiative.

The FPE programme has increased school enrollment to 8.3 million children from inception in 2003.

The British have withheld Sh1.2 billion demanding that the government identifies, arrests and charges those responsible for the loss of Sh100 million.

On Thursday, The Star reported that Ministry of Education officials have for the last six years irregularly skimmed off FPE funds to the tune of Sh5.5 billion.

The officials steal between Sh50 and Sh75 per child when disbursing the funds to schools.

When FPE was established in 2003, Parliament allocated a standard figure of Sh1,020 for each of the 8.3 million children in primary schools countrywide.

According to data we obtained from Treasury and donors, Education ministry officials could not account for Sh5.5 billion out of Sh47.5 billion so far disbursed.

Education Permanent Secretary Karega Mutahi attributed the skimming off to a mathematical problem in enrollment figures submitted by respective schools. However, he denied that funds have been embezzled.

"Human errors in schools' records of enrollment of pupils are what causes the problem. It is a problem that will continue to occur," Karega said.

Meanwhile, investigations show that there are cartels entrusted with protecting public funds but end up beating the system.

According to government insiders, these cartels are responsible for designing internal systems whose weaknesses they end up exploiting.

They position themselves to control the paper trail in ministries - from procurement, to minutes of meetings, employment records, inventories of equipment, vehicles, schedules and all other documents ministries use to function.

Where and when necessary, paperwork is altered, minutes doctored, letters disappear and reappear when the 'deal is done'. Anything that can implicate them in any wrongdoing is systematically destroyed.

Ministers and their permanent Secretaries are rarely part of these cartels.

These cartels would mainly have a deputy secretary who doubles up as the administrator for the ministry and will have a corresponding Authority to Incur Expenditure (AIE), and will also sit on the Ministerial Tender Committee often as chairmen/women.

The individuals also head secretariats where they will have the final say over who is employed directly or seconded from other ministries.

In addition, the cartels rope in the ministries' legal secretaries.

Most of these individuals will have godfathers, also behind the scenes in the Office of the President and in the provincial administration, in order to tap into projects and programmes at the district level.

This loose group over a period of time will coalesce into a notorious and greedy cartel that will have billions of shillings at its fingertips.

This will be used to bribe and intimidate any who oppose it including ministers and the PS's in their own ministries.