By Kenan Miruka 

Kenya: A major showdown is looming between Governors and the Treasury over its plan to withhold part of the Sh248 billion set aside for counties. The Treasury plans to release the money on a quarterly basis, a move meant to help monitor how the money is spent.

The Treasury apparently believes counties lack requisite infrastructure to efficiently manage funds they receive from the national government, hence the decision to keep a tight grip on county spending.

The ‘public purse keeper’ plans to release the money to counties after they submit programme-based budgets in a bid to check on their spending. 

Recently, Budget Controller Agnes Odhiambo warned that the national government needed to keenly monitor county spending. In an assessment report on the implementation of the 2012/2013 budget over the past nine months, the Budget Controller said there was need to put in place a comprehensive monitoring and evaluation framework to ensure close supervision of projects at the county level.

She cited lack of sufficient human capacity and infrastructure to rationalise the integrated financial management system required to track expenditure in counties, urging governors to fast track the implementation of checks and balances to ensure efficient utilisation of funds.

However, the proposed close control by the Treasury has elicited protests among Governors amid fears that there are plans by the national government to frustrate county governments and devolution through such controls.

Governors who spoke to Agenda 2013 warned that such acts by the national government were aimed at frustrating their work and they maintained that they have the institutional mechanisms to audit their expenditure.

Murang’a Governor Mwangi wa Iria said it would be wrong for Treasury to treat counties like ministries in disbursement of funds for operations, warning that development plans for counties were likely to be hampered.

“The tendency by Treasury to withhold money is the reason why most government projects have not succeeded across the country and we cannot allow this to happen in the county system of government.  There seems to be a deliberate scheme to reduce funding to counties, and this means an end to devolution,” said Wa Iria.

Acting superior

He said Treasury should stop acting as though it was executive over counties, saying it was not sustainable to release funds on a quarterly basis yet work plans are drafted annually.

“They should define what they mean by capacity to audit and monitor expenditure. We have adequate personnel with the right credentials to manage funds at the counties. Procurement plans are done on an annual basis and Treasury can only control money for ministries but not for counties,” he added.

Kisii County governor James Ongwae termed the move as malicious, saying it is wrong to withhold monies meant for the running of counties.

“Counties certainly have institutional capacity to audit utilisation of the funds they receive. During our performance management workshops, we have clearly set out our plans on how to utilise funds for development projects. It appears someone is out to frustrate our work. Withholding part of our allocation will affect our planning,” said Ongwae.

His Meru County counterpart Peter Munya complained that counties were being forced to use the Integrated Financial Management Information System, which Treasury uses to check spending by ministries.

“What this means in effect is that county government will not have financial independence to run their affairs because they will need to operate under the Treasury’s financial information management system. However, counties should get money directly,” said Munya.

He wondered how centralising financial control of funds would promote autonomy of counties, saying it was unconstitutional.

Audit funds

His Migori County counterpart Okoth Obado dispelled fears that county governments lacked fiscal discipline, saying that Treasury should disburse all monies meant for counties at once.

“It is not like county governments are going to spend money extravagantly. Spending follows laid down procurement procedures with internal and external audits. Local authorities had accountants and auditors and if all these are pooled together, we shall have more than enough staff to man county treasuries. In fact we are even thinking of laying-off some,” he said.

 “It is like Treasury fears that releasing such colossal sums of money may lead to inflation and affect the central bank’s lending rates. Let them advance counties all money due to them. We can have the money in accounts that can earn interest and thus Help Bridge the gap which exists between some counties.”

Stifling devolution

Last week, Cord leaders Raila Odinga and Kalonzo Musyoka lashed out at the Jubilee Government, accusing it of trying to stifle devolution through the creation of the ministry of devolution and allocating it a whopping Sh84 billion.

The two faulted the Government for creating the ministry, arguing that the funds allocated to it should have instead been channelled to the 47 counties to facilitate devolution.

Turkana governor Josphat Nanok expressed pessimism that the integrated financial management system will not work in areas that have poor Internet coverage, citing his county’s headquarters as a case in point.