As part of the ongoing reforms to cut on government expenditure and enhance revenue collections, the National Treasury has instructed parastatal heads to ensure that budgets financial year which commences on July 1 are rationalized.

This, according to Treasury Cabinet Secretary Prof. Njuguna Ndung’u, will entail cutting down the recurrent expenditure by 30 per cent.

CS Ndung’u wants the agencies to resubmit recurrent expenditure budgets for the next financial year, reflecting not more than 70 per cent of the current budgets on operations; they have up to April 2 to do so.

The parastatals will not be allowed to embark on new projects without written approval from the National Treasury.

For institutions that are commercial in nature, they have been directed to provide 80 per cent of profits after tax for payment of dividends, meaning they will be paid to government to enhance revenue collection.

Regulatory authorities have been directed to remit 90 per cent of surplus funds to the government.

For parastatals that generate revenues beyond expected, they have been instructed that they shall not spend it at source. They shall also not be allowed to revise their approved expenditure budget even if such revision is below ten per cent of the budget.

To cut unplanned expenditure, parastatals have been banned from funding operations and capital expenditure for ministries, departments, State corporations and agencies, an avenue that had been used by some of the parent ministries.

To cut on luxuries, no parastatal shall be allowed to pay for club membership fees whether for individual or corporate categories.

CS Ndung’u further directs that payment of subsistence allowance and reimbursement for use of personal cars shall only be payable to a director who travels and spends a night away from declared residence.

The National Treasury further emphasized the earlier circular banning procurement of corporate wear and promotional merchandise which many have been using as part of branding activities.

The CS decried failure by some of the agencies to mainstream payments and budgetingactivities on the digital platforms.