Shock of Sh182b lying unspent in county bank accounts

Treasury allocated county governments Sh269.1 billion in the 2013/2014 financial year, which closes this month, but the regional units were only able to spend just slightly over a third of the amount.

Despite Kenyans’ yearning for better roads, health facilities and clean water, among other improved services, a whopping Sh182 billion is lying idle in county bank accounts.

The situation is compounded by the fact that of the Sh86.7 billion that the counties spent, Sh74.6 billion went to salaries, purchase of vehicles and foreign trips by Members of County Assemblies, among other recurrent budgetary requirements. Incredibly, the 47 counties spent a paltry total of Sh12.1 billion on development. Three counties, Mombasa, Lamu and Mandera, did not spend a single coin on development. And the money spent on sitting allowances, buying vehicles and foreign trips by some counties exceeded the budgeted amount.

This is according to a report by the office of the Controller of Budget (CoB) that was presented to the Senate yesterday.

Some county chiefs are under investigation after they spent more than their governments were allocated, inviting the wrath of the CoB. However, it does not necessarily mean that all governors had no use for the money now lying idle in the coffers. In some cases, delays in cash dispersal by the National Treasury and bureaucratic red tape surrounding expenditure of public funds, particularly in the stages of drawing, evaluation of projects and procurement, took a toll on the speed with which county governments could execute their programmes.

Governosr Evans Kidero (Nairobi), Alfred Mutua (Machakos) and Kinuthia Mbugua (Nakuru) spent the highest amounts at Sh13 billion, Sh3.5 billion, and Sh3.3 billion respectively. Nairobi had been allocated Sh6.3 billion, Machakos Sh4.1 billion and Nakuru Sh4.4 billion. Conversely, Lamu, Isiolo and Tana River counties recorded the lowest expenditure in absolute terms at Sh436.7 million, Sh619.4 million and Sh762.3 million respectively. Lamu had been allocated Sh754 million, Isiolo Sh1.07 billion and Tana River Sh1.4 billion.

The report titled “Progress Report on Revenue and Expenditure for County Governments” details the expenditures of all the 47 counties for the past nine months - July 2013 to June 2014 - when the report was compiled.

“In the past nine months, county governments spent Sh12.1 billion on development activities, which represents 14 per cent of the total expenditure,” explained CoB Agnes Odhiambo.

IMPEACHMENT THREATS

Machakos County had the highest expenditure on development at Sh1.4 billion followed by Nairobi City County (Sh1.19 billion) and Kakamega County (Sh1.16 billion.)

Ms Odhiambo said the Auditor General and Ethics and Anti-Corruption Commission would investigate counties that spent beyond their budgets.

“I know some of the county assembly members have been holding governors at ransom with threats of impeachment if they don’t allocate them more money for traveling and sitting allowances. We are watching them,” she warned. “County assemblies are even trying to finish the amount allocated to them on endless foreign trips. Kakamega MCAs have exceeded the amount allocated to them for traveling. We will wait for an audit report before we take action,” she added.

Nairobi, she said, had continued to spend local revenue at source without approval from the CoB. And Kericho County spent the balance brought forward from the financial year 2012/2013 without first surrendering it to the County Revenue Fund (CRF) as required by Section 136(2) of the Public Finance Management Act, 2012.

“Expenditure by Nairobi and Kericho counties exceeded the total funds released during the period under review, accounting for 162.4 per cent and 103.9 per cent respectively for funds released,” Odhiambo revealed.
“Counties that have overspent will have their accounts audited by the Auditor General and those found culpable will have their files sent to the anti-corruption (commision) for further probe,” Odhiambo said in an interview yesterday.

The national government was also put on the spot for failing to release funds meant for counties on time.

“The National Treasury was expected to disburse funds monthly to the County Revenue Fund (CRF) accounts using the cash disbursement schedule approved by the Senate,” reads the report.

According to the schedule, the national government was expected to have disbursed Sh148.9 billion to the counties by March 31, 2014. However, only Sh110.1 billion had been disbursed by the end of March 2014. Only three counties, namely Bomet, Machakos and Nairobi, had received their allocation for February this year, while no county received its allocation for March by the end of the third quarter.

“Release of funds to the CRFs by the National Treasury was largely unpredictable. Counties were unaware when the next disbursements would be effected, which affected budget implementation as some counties were forced to reschedule planned activities,” she explained.

“Kisumu, Embu and Nakuru counties had the lowest proportion of expenditure on development as a percentage of their total expenditure at 1.1 per cent, 1.2 per cent and 2.5 per cent respectively. In the period under review, Nairobi City County received the highest disbursement of Sh6.3 billion followed by Turkana (Sh4.3 billion), Kakamega (Sh3.8 billion), with Mandera and Nakuru each receiving Sh3.7 billion.

The lowest recipients were Lamu (Sh840.4 million), Isiolo, Elgeyo/Marakwet and Tharaka Nithi (1.3 billion each), and Taita Taveta (Sh1.4 billion).