A parliamentary committee has questioned why the Kenya National Bureau of Statistics (KNBS) and the Kenya Institute of Public Policy and Analysis (Kippra) are collectively spending more than Sh300 million on rent each year, despite government offices remaining vacant.
The Finance and National Planning Committee has flagged the two semi-autonomous State agencies for their high rent costs and ordered the National Treasury to develop comprehensive guidelines governing office rent and prioritising available government space by December 31.
The Treasury has been instructed to develop the governance framework by the end of the year to reduce rent-related expenditures among ministries and State departments.
“The committee observed that semi-autonomous government agencies (sagas) such as Kippra and KNBS under the State Department for Economic Planning, collectively spend over Sh300 million annually on rental expenses,” the Budget and Appropriations Committee said in a report, citing the Finance and National Planning Committee.
“However, these agencies hold significant unutilised funds that could be redirected towards acquiring or constructing permanent office premises.”
According to recent disclosures, KNBS spent the most on rent, paying Sh125.1 million for its headquarters in the year to June 2023, while Kippra paid Sh3.8 million in rental charges for the 2023/24 fiscal year.
KNBS has an operating lease agreement with Royal Ngao Holdings Limited that includes a biennial rent review to match the prevailing market rates for the provision of the office block that houses its headquarters at Real Towers in Upper Hill.
The statistician’s office has other rent and rates expenses, which increased to Sh5.4 million in the financial year to June 2023 from Sh3.2 million previously.
Despite financial challenges identified by the Auditor General, KNBS continues to spend excessively on rent. The agency spends more than it accrues from government transfers, donor funding, and its internal revenue streams.
“The statement of financial performance reflects a deficit before remission to the National Treasury of Sh350.3 million, resulting in a decrease in revenue reserve over the last five years to Sh1.3 billion from Sh8.7 billion,” said Auditor General Nancy Gathungu.
“Although management has indicated it has resources to continue its business for the foreseeable future, if strategies are not put in place to reverse the trend, the bureau is likely to face financial challenges in the future.”
Kippra, whose head office is housed at Bishop Garden Towers in Upper Hill, has previously attempted to put up its own offices, but is yet to be allocated land for the project.
The agency initially indicated it had 2.57 hectares in Upper Kabete valued at Sh250 million to put up its headquarters.
The project was stopped by the National Land Commission after the Director of Veterinary Services said that the designated plot had been hived off from the veterinary land.
As of June last year, Kippra had not yet been allocated an alternative piece of land for the project.
The National Treasury funded KNBS and Kippra to the tune of Sh1.3 billion and Sh527.9 million in the 2022/23 financial year and the 2023/24 fiscal cycle respectively.
