De­layed re­lease of funds hits coun­ties’ spend­ing on projects

New re­port shows 14 coun­ties spend zero on projects in the first half of the fi­nan­cial year, with the sit­u­a­tion at­trib­uted to de­layed funds from Trea­sury

Daily Nation (Kenya) - - NATIONAL NEWS - BY KENNEDY KIMANTHI @Ki­man­thiken kki­man­thi@ke.na­tion­media.com

33 coun­ties in­curred only Sh11.36 bil­lion on de­vel­op­ment ac­tiv­i­ties dur­ing the pe­riod

Four­teen coun­ties did not in­cur any ex­pen­di­ture on de­vel­op­ment in the first half of this fi­nan­cial year. The Con­troller of Bud­get, Ms Agnes Od­hi­ambo in the half-year re­port for the 2017/18 fi­nan­cial year, sin­gled out Embu, Garissa, Kirinyaga, Kisumu, Meru, Nakuru, Nandi, Nyan­darua and Ny­eri as the af­fected coun­ties.

Oth­ers are Si­aya, Taita-taveta, Tharakanithi, Vi­higa, and West Pokot.

She at­trib­uted this to de­lays in dis­burse­ment of monies by the Na­tional Trea­sury, which af­fected the timely im­ple­men­ta­tion of county pro­grammes.

“In the re­port­ing pe­riod, the Na­tional Trea­sury did not fully ad­here to the Dis­burse­ment Sched­ule, which af­fected ex­e­cu­tion of bud­geted ac­tiv­i­ties,” she said.

Cu­mu­la­tively, the re­main­ing 33 coun­ties in­curred Sh11.36 bil­lion on de­vel­op­ment ac­tiv­i­ties in the re­port­ing pe­riod, rep­re­sent­ing an ab­sorp­tion rate of 8 per cent of the an­nual de­vel­op­ment bud­get, which is a de­crease from 21.5 per cent re­ported in a sim­i­lar pe­riod of fi­nan­cial year 2016/17 when de­vel­op­ment ex­pen­di­ture was Sh35.73 bil­lion.

Kil­ifi recorded the high­est ex­pen­di­ture on de­vel­op­ment ac­tiv­i­ties in ab­so­lute terms at Sh1.65 bil­lion, fol­lowed by Ki­ambu and Kakamega at Sh856.28 mil­lion and Sh844.69 mil­lion re­spec­tively.

The out­cry from gov­er­nors over the late dis­burse­ments has been re­cur­ring since the ad­vent of de­vo­lu­tion and Ms Od­hi­ambo has come out to rec­om­mend that this be tamed to en­sure undis­rupted con­ti­nu­ity of ser­vices.

Last month, Deputy Pres­i­dent Wil­liam Ruto agreed that the abil­ity of coun­ties to plan and ex­e­cute their bud­gets ef­fec­tively de­pends on Trea­sury’s timely dis­burse­ment of rev­enues.

“Where de­lays oc­cur, it is im­por­tant to ex­plain them in a timely and proper man­ner to en­able coun­ties make ap­pro­pri­ate ad­just­ments. I ac­knowl­edge that the Na­tional Trea­sury, Con­troller of Bud­get, Com­mis­sion on Rev­enue Al­lo­ca­tion and the Min­istry of De­vo­lu­tion can en­sure dis­burse­ment of funds faster,” he said in his speech de­liv­ered at the De­vo­lu­tion Con­fer­ence in Kakamega.

Other rea­sons Ms Od­hi­ambo cited were the high wage bill and de­cline or un­der­per­for­mance in lo­cal rev­enue col­lec­tions, which con­se­quently make the coun­ties be­come in­creas­ingly re­liant on the state for fund­ing, putting a strain on the Trea­sury to pro­vide top-up funds.

In Ny­eri and West-pokot for in­stance, Ms Od­hi­ambo blamed the coun­ties for fail­ing to es­tab­lish an In­ter­nal Au­dit Com­mit­tee to over­see fi­nan­cial op­er­a­tions con­trary to Sec­tion 155 of the PFM Act, 2012.

Ac­cord­ing to the law, the au­dit com­mit­tee forms a key el­e­ment in the gover­nance process by pro­vid­ing an in­de­pen­dent ex­pert as­sess­ment of the ac­tiv­i­ties of top man­age­ment, the qual­ity of the risk man­age­ment and fi­nan­cial re­port­ing to the county.

In Vi­higa County, op­er­a­tional de­lays and In­te­grated Fi­nan­cial Man­age­ment In­for­ma­tion Sys­tem (Ifmis) con­nec­tiv­ity chal­lenges slowed the ap­proval of pro­cure­ment re­quests and pay­ment to sup­pli­ers.

Apart from de­lays in dis­burse­ments, un­der-per­for­mance in lo­cal rev­enue col­lec­tion in Embu af­fected its de­vel­op­ment spend­ing, hav­ing de­clined by 36.2 per cent from Sh197.01 mil­lion in the first half of FY 2016/17 to Sh125.60 mil­lion in the first half of FY 2017/18.

Sta­tis­tics from Coun­cil of Gov­er­nors in March show as of De­cem­ber last year, the coun­ties had only re­ceived 28 per cent of what was ap­proved by Par­lia­ment, com­pared to an av­er­age of 37 per cent since the on­set of de­vo­lu­tion.

Ac­cord­ing to In­ter­na­tional Bud­get Part­ner­ship-kenya coun­try man­ager Abra­ham Rugo, most of the coun­ties were also yet to be fully op­er­a­tional dur­ing the pe­riod un­der review.

“Many coun­ties were set­ting up their ad­min­is­tra­tive units which means some de­vel­op­ment projects which re­quired the ap­provals of fi­nance ex­ec­u­tives were put on hold and, there­fore, the rea­son why some did not re­port any de­vel­op­ment,” Mr Rugo said.

And in a first, Mrs Od­hi­ambo gave a rare thumbs-up to use of funds by coun­ties in pay­ment of ward rep­re­sen­ta­tives’ al­lowances and travel ex­pen­di­ture.

Coun­ties’ ex­pen­di­ture on MCAS sit­ting al­lowances re­duced by a whop­ping 67 per cent.

The re­port says Sh422 mil­lion was paid in al­lowances com­pared to the Sh1.3 bil­lion spent in a sim­i­lar pe­riod of the 2016/17 fi­nan­cial year. Al­lo­ca­tion for this pe­riod was Sh3 bil­lion, mean­ing what was spent was 13.9 per cent of the ap­proved bud­get.

Only Narok did not re­port any ex­pen­di­ture on the rep­re­sen­ta­tives al­lowances but Kakamega (Sh108,172), Sam­buru (Sh92,372), Turkana (Sh90,505), Ta­nariver (Sh150,558) and Taita-taveta (Sh80,969) paid more than Sh80,000 to each of their MCAS which is higher than the Salaries and Re­mu­ner­a­tion Com­mis­sion (SRC) monthly max­i­mum ceil­ing.

Those that paid the least monies were Trans-nzoia (Sh3,997), Vi­higa (Sh4,145), Ka­ji­ado (Sh4,778), Mu­rang’a (Sh6,968) and Migori (Sh7,807).

The Con­troller of Bud­get also raised con­cern on the high ex­pen­di­ture on such re­mu­ner­a­tion which cu­mu­la­tively was Sh66.48 bil­lion rep­re­sent­ing 71.9 per cent of the to­tal re­cur­rent ex­pen­di­ture.

“The of­fice noted con­tin­ued in­crease in wage bill and rec­om­mends county gov­ern­ments to en­sure that ex­pen­di­ture on per­son­nel emol­u­ments should be con­tained at sus­tain­able lev­els and in com­pli­ance with Reg­u­la­tion 25 (1) (b) of the Pub­lic Fi­nance Man­age­ment (County Gov­ern­ments) Reg­u­la­tions, 2015,” she said.

Travel ex­pen­di­ture re­duced by 28.4 per cent from Sh5.2 bil­lion in the 2016/17FY to Sh3.77 bil­lion in the re­port­ing pe­riod. Out of this amount, Sh3.4 bil­lion was spent on do­mes­tic travel and Sh370 mil­lion on foreign ex­pe­di­tions. Narok County in­curred the high­est ex­pen­di­ture of do­mes­tic and foreign travel at Sh243.75 mil­lion, fol­lowed by Migori and Taita Taveta at Sh165.41 mil­lion and Sh163.61 mil­lion re­spec­tively.

But Mr Rugo stated last year’s elec­tion­eer­ing pe­riod could have led to the de­cline in spend­ing on al­lowances and trav­els.

“There was no de­cline in ac­tual terms but in ac­tiv­i­ties by the coun­ties in the pe­riod be­tween July to De­cem­ber 2017 as most coun­ties were still set­tling down. Also, most they had not re­ceived their al­lo­ca­tions from the Na­tional Trea­sury,” Mr Rugo said.

FILE | NA­TION

Con­troller of Bud­get Agnes Od­hi­ambo iden­ti­fies high wage bill and de­cline or un­der­per­for­mance in lo­cal rev­enue col­lec­tions as other rea­sons af­fect­ing coun­ties.

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