Counties fail to meet revenue collection target by 77 per cent

Kenya: The National Government needs to increase the financial capacity of county governments to use funds wisely and collect more revenue.

At present, most devolved governments cannot collect enough revenue and are performing worse than the defunct local authorities and municipal councils.

According to the Controller of Budget’s half year report, counties had targeted to cumulatively collect Sh67.8 billion in the 2013/14 financial year, but the actual revenue collected during this review period stood at Sh9 billion.

This represents a modest 13.2 per cent of the annual target.

“The absence of strong and independent internal audit units, weak revenue bases, unstandardised remuneration, high public expectations and transition challenges, as some of the impediments to smooth functioning of devolution,” said Benson Okundi, Certified Public Accountants of Kenya (ICPAK) chairman.

He made remarks yesterday during the launch of Devolution Report in Kenya on public finance systems-one year on. The report is a culmination of the baseline survey conducted by the Institute of ICPAK.

It focuses itself on the public finance management and other functional control systems adopted by the county governments since their inception on March 2013.

The report comes at a time when the country is aligning its budget to Vision 2030 targets.

“While there is a decline in revenue collection in most counties, we also need to undertake cost cutting measures through staff rationalisation, to get rid of such positions as village administrators,” explained Suba Member of Parliament, John Mbadi.

“Devolution has been a huge and one of the most ambitious projects ever undertaken in Kenya’s history. The sheer size of this change in governance structure has also brought significant challenges,” said George Ooko, Commission on Revenue Allocation’s (CRA’s) Chief Executive.

Costing of functions transferred to the counties is yet to be done. Further, a steering committee to oversee staff rationalisation in counties, which brings together the Council of Governors and Cabinet Secretary for Devolution and Planning Anne Waiguru, is yet to hold a single meeting, and has been postponing its sittings since it was formed.

The Office of the Controller of Budget has identified low absorption of development funds, inadequate technical capacity at the county level, capacity of Government and increasing wage bill. It observed that for the last six month of the 2013/14 year, this stood at 47.8 per cent of total expenditure.