THE Government blew a larger than expected hole in its recurrent expenditure last year, and the Treasury Department is blaming the payroll for that.
The department is conducting a review to see where it occurred and who caused it, so those responsible can be made to account and closely monitored in future.
This was revealed yesterday when Finance and Treasury Minister Patrick Pruaitch released the final budget outcome (FBO) for last year.
Figures released said the recurrent expenditure last year was K4,166.4 million, which was K213.8 million higher than the revised budget estimates.
This was due to higher expenditure, particularly under personnel emoluments costs by provincial and national departments.
Mr Pruaitch said the total expenditure on personal emoluments was higher than the revised estimate, and Treasury was reviewing the processes of monitoring and controlling expenditure incurred from the payroll.
He said they would monitor agencies that continue to overspend.
Despite this, last year’s FBO recorded a deficit of K36.3 million or 0.2% of GDP against a revised deficit of K86.0 million or 0.4% of GDP announced in this year’s budget.
This was an improvement from the high deficit of K478.5 million (2.2% of GDP) recorded for 2008. The improved budget deficit outcome was due to higher revenue. Total revenue and grants for last year was K6,651.3 million, which was slightly higher than the revised budget estimate by K11.7 million.
Abstracting from grants, total revenue collections last year were higher by K172.8 million compared to the revised estimate.
On the expenditure side of the budget, total expenditure and net lending last year was K6,687.6 million, which was lower than the revised budget estimate published in this year’s budget by K37.7 million.
Total development expenditure was K2,348.7 million. This was lower than the revised budget estimate by K247.0 million.
Mr Pruaitch also admitted that detailed expenditure on trust accounts were lacking.
“Unfortunately, a number of executing agencies did not provide expenditure reports on their trust accounts.
“A detailed report on the expenditures from trust accounts will be provided in the mid-year economic and fiscal outlook report in July,” he promised.
As a result of the payroll blowout, the Government had to borrow to fund the deficit. This caused a net increase in overall debt last year.
Mr Pruaitch said the budget deficit last year resulted in total public debt increasing to K6,944.1 million, up by K17.4 million from a debt level at the end of 2008 of K6,962.7 million.
But strong nominal GDP growth contributed to debt as a percentage of GDP fell from 32.1% in 2008 to 31.9% last year, he said.