Concern as report pins counties on wastage, underdevelopment

Controller of Budget Agnes Odhiambo. Cumulatively, Counties spent Sh7.9 billion on domestic and foreign travels and Sh.6.3 billion on purchase of vehicles.[PHOTO:FILE]

Nairobi; Kenya: Counties are once again in a spot for diverting money for development towards recurrent spending. This comes amid clamour for control of misuse of public funds.

A report by the Office of the Controller of Budget shows counties slashed development budgets and used the money to pay salaries, buy vehicles, domestic and foreign travels and Member of County Assembly (MCAs)’ sitting allowances.

The report shows while absorption of funds increased during the 2013/2014 fiscal year, it was mainly on recurrent activities, thereby stifling development projects at the grassroots. The report dubbed ‘County Governments annual Budget Implementation Review Report’ for the 2013/2014 Fiscal Year, cites high expenditures on domestic and foreign travel, failure to fully implement IFMIS by some County Governments, low absorption of development funds and inadequate capacity in most functional areas as key issues and challenges faced by devolved units in budget implementation.

Inadequate staffing

Others include failure to submit financial reports on a timely basis and failure to deposit all local revenue into the County Revenue Fund, inadequate staffing, under-performance in local absorption rate delayed and unpredictable disbursement of grants by the National Government.

According to the report dated August 2014, recurrent expenditure recorded the highest absorption rate at 82.7 per cent while development expenditure stood at 36.4 per cent in FY 2013/14. According to the report, Sh8.4 billion was set aside for buying vehicles but the actual expenditure on autos amounted to Sh6.3 billion or 74.8 per cent of the budgetary allocation in the area. The report notes that expenditure by eight counties on vehicles exceeded their budgetary allocations. These counties were Tana River at 158.4 per cent, Kericho at 128 per cent, Kajiado at 123.6 per cent, Machakos, Trans Nzoia, Homa Bay, West Pokot and Samburu at 120.9 per cent, 105.1 per cent, 104.2 per cent, 104.1 per cent and 100.6 respectively.

Machakos County had the highest expenditure on vehicles at Sh863 million, followed by Nairobi County at Sh367 million and Migori County at 334.6 million. Counties that recorded the lowest expenditure on autos during the period under review were Elgeyo Marakwet at Sh6.4 million, Murang’a County at Sh21.2 million and Busia County at Sh22.8 million.

Counties spent Sh132.8 billion on recurrent expenditure, representing 78.4 per cent of total expenditure during the period under review according to the report. This represents 96.5 per cent of the funds released for recurrent expenditure and 82.7 per cent of the total annual recurrent budgets for the counties. Of this amount, Sh77.4 billion (45.7 per cent) was spent on personnel emoluments, Sh51.7 billion (30.5 per cent) on operations and maintenance, Sh36.6 billion (21.6 per cent) on development and Sh3.7 billion (2.2 per cent) on debt repayment and pending bills.

According to the report, Meru County recorded the highest recurrent expenditure absorption, at 115.9 per cent of the annual recurrent budget, followed by Nyeri and Tharaka Nithi and Murang’a counties at 107.8 per cent, 104.8 per cent and 101.9 per cent respectively. “Recurrent expenditure by the four counties exceeded their recurrent budgetary allocation an indication that funds meant for development projects were used for recurrent activities,” says report.

Wajir, Turkana and Bomet counties had the lowest proportion of their expenditure on recurrent activities as a percentage of their total expenditure at 42.2 per cent, 43.5 per cent and 51.6 per cent respectively.

Absorption rate

Turkana, Garissa and Lamu Counties recorded the lowest absorption rate of recurrent budget allocation during the period under review at 35.7 per cent, 51.4 per cent and 53.1 per cent respectively. Mombasa, Kisumu, and Tana River counties had the highest expenditure on recurrent activities as a proportion of their total expenditure at 97.9 per cent, 97.8 per cent and 97.6 per cent respectively.

During the period (July 2013-June 2014), counties spent Sh77.4 billion on personnel emoluments representing 45.7 per cent of total expenditure. Nairobi County had the highest expenditure on personnel emoluments, which stood at Sh10.3 billion followed by Kiambu County at Sh3.7 billion and Mombasa County at Sh3.2 billion. Cumulatively, counties spent Sh7.9 billion on domestic and foreign travels and Sh6.3 billion on purchase of vehicles and allocated Sh3.2 billion for the payment of sitting allowances to the MCAs.