Tough rules to delay county cash pay-out

By Ally Jamah

County governments have two weeks to fix their budgets or miss out on the Sh210 billion allocated to them by the National Treasury.

Delays to access the funds could disrupt services in counties, particularly since they now have additional functions to discharge.

Controller of Budget Ms Agnes Odhiambo advised county governments to expunge wasteful allocations in their budgets, including hefty perks for governors and members of county assemblies (MCAs).

Odhiambo was addressing a meeting between governors and Deputy President William Ruto in Nairobi yesterday to resolve the devolution row. Cheserem was also present.

This comes after a report by the Commission on Revenue Allocation (CRA) revealed that only 15 counties had balanced their budgets .

These are Nairobi, Kajiado, Narok, Elgeyo/Marakwet, Garissa, Kericho, Kiambu and Nyeri. Others are Uasin Gishu, Kakamega, Bungoma, Muranga, Kirinyaga, Embu and Taita-Taveta.

“Our stand is the same as that of the Controller of Budget. There is no way you can run a budget with a deficit,” CRA chairman Micah Cheserem told The Standard.

“To do so you will destroy the private sector. You will soon be unable to pay for services from the private sector. Financial indiscipline is cause for a county government to be taken over by the national government,” he warned.

“Tell those governors with budget deficits to get commitment in writing from donors or wherever they will get the money. This will help the Controller of Budget in managing the budget deficits,” advised Cheserem.

Ms Odhiambo said the wasteful allocations, which include billions of shillings in personal benefits and lavish lifestyles for governors, were illegal.

She also expressed concern over counties’ use of huge imprests and warned that foreign travel by governors was fatiguing host nations. “We will in the next week look at procurement issues in counties,” she said. The MCAs allotted to themselves car grants, mortgages and gratuities while approving budgets for their respective counties, sparking public uproar.

Starved Of Cash

Later when asked by journalists whether counties will be starved of cash until they comply with the law, the Controller of Budget said:

“The requirement to revise their budgets does not mean they will not receive any money. They may get a small portion of their budgets but the full amount will only be released after they have complied with the law.”

“From our analysis of the 2013/2014 county budgets, it has become apparent that the budgets were not done well. Those errors should be revised before we can approve withdrawals of the money, “ Odhiambo told the meeting at the Kenya School of Government.

She spelt out conditions the 47 county governments must meet to access their share of national revenue. 

The startling news came after the government published a notice in the Kenya Gazette detailing the functions transferred to counties.

Ms Odhiambo said items to be expunged from county budgets include high allocations for travel and car grants and loans that were provided for irregularly.

She further opposed grants for purchase of vehicles and cash for mortgages included in budgets without first seeking approvals from the Salaries and Remuneration Commission.

On Friday, President Uhuru Kenyatta signed into law the County Allocation of Revenue Bill, setting the stage for county governments to receive funding.

Revised budgets need to be approved by county assemblies, which have clashed with governors. Yesterday, Kisumu Governor Ranguma lamented that the initial budget he had drawn was balanced but the county assembly had raised it by Sh2 billion.

National Treasury Cabinet Secretary Henry Rotich said they are developing new regulations to guide counties in handling budgets to prevent them from making arbitrary allocations without any ceilings.

But Council of Governors head Isaac Ruto said it would take counties at least a month to revise their budgets as required.

Deputy President William Ruto asked governors to move with speed and meet the requirements set in law in order to access taxpayers’ funds.

“We have set up three committees to smoooth out the sticky points that counties are facing in the budgeting process. I am ready to meet them soon to ensure that we resolve all outstanding issues,” he said.