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Counties face Sh90 billion debt, latest report reveals

By Harold Odhiambo | Published Wed, August 1st 2018 at 00:00, Updated July 31st 2018 at 20:09 GMT +3

Samburu Governor Moses Lenolkulal when he appeared before the Senate Public Accounts and Investment Committee on audit queries at Parliament on Monday 30/07/18. [Boniface Okendo,Standard]

County governments owe Sh90 billion, the latest report by Controller of Budget (COB) Agnes Odhiambo shows.

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Most of the debts were accumulated within the first nine months of the last financial year.

The survey, County Governments Budget Implementation Review Report, indicates that almost all the counties had pending bills as at March 31, this year.

Governors spent about Sh183.6 billion between July 2017 and March this year. Out of this, Sh157.6 billion went recurrent expenditure while Sh25.9 billion to development. Out of what was spent on recurrent expenditure, Sh108 billion went to salaries.

Clear bills

Odhiambo noted that several counties had committed to clear their pending bills.

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Nakuru, Mombasa, Embu and Tana River had committed to pay Sh2.5 billion, Sh1.9 billion, Sh1.3 billion and Sh1.7 billion respectively.

Nakuru, which spent about Sh315.3 billion on development, faces a debt of Sh463 million which relates to development projects the county initiated and Sh2.5 billion for recurrent budget.

In the period under review, the county which had Sh9 billion in its coffers, registered a drop in development expenditure by about 5.3 per cent.

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Tana River recorded the biggest debt in pending bills of Sh1.7 billion. The amount includes Sh1.7 billion for recurrent expenditure and Sh Sh77 million for development.

The COB report further shows the county spent about Sh1.8 billion out of which Sh1 billion was used to pay salaries even as its wage bill continued to soar.

Governor Ali Hassan Joho’s Mombasa County made a commitment to pay Sh1.6 billion in pending bills, which included Sh1 billion for recurrent expenditure.

Lamu, Kilifi and Taita Taveta recorded debts of Sh57 million, Sh527 million and Sh107 million respectively.

Kisumu did not spend any money on development during the period under review but accumulated debts in pending bills amounting to Sh330 million. The debt relates to the recurrent expenditure.

This came as governor Anyang’ Nyong’o questioned some of the bills his government inherited from the previous regime which amounts to Sh3.5 billion.

In March this year, Nyong’o ordered a forensic audit, through a task force headed by Thadeus Okwara, to establish the origin of the pending bills. The task force capped the debt at Sh1.5 billion.

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Revenues dropped

Odhiambo noted that Kisumu spent a chunk of its funds on the wage bill, which increased by about 16 per cent. This was despite the fact local revenues dropped by 25 per cent.

The county also increased its expenditure on foreign travel by about 20 per cent, splashing Sh168 million on their trips.

Siaya accrued about Sh461 million in pending bills while Homa Bay registered Sh282 million.

Migori, which has reportedly been losing millions to ghost workers, had debts amounting to Sh1.8 billion. 

An internal audit established that the county was losing about Sh7, 545,643 a month in salaries paid to ghost workers.

The report unveiled by Migori governor Okoth Obado had stated that 267 of the 3,345 employees listed in the payroll did not exist, which could explain the huge pending bills the county faces.

Kakamega County, which spend Sh6.1 billion on various activities, had pending bills amounting to Sh749 million.

Highest allocations

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The county was among those that got the highest allocations from the County Revenue Fund of Sh6.6 billion. Nairobi had the highest allocation at Sh14 billion.

Busia, Bungoma and Vihiga had pending bills of Sh581 million, Sh652 million and Sh139 million respectively.

In Eastern region, Embu had pending bills of Sh1.3 billion. The county spent Sh3.2 billion during the period under review.

Charity Ngilu’s Kitui County had pending bills of Sh996 million. Bills for development expenditure were capped at Sh731 million.

The report shows the county spent Sh4.4 billion, out of the Sh6.4 billion it received.

“The expenditure excluded outstanding commitments which amounted to Sh731.9 million for development activities and Sh264.2 million for recurrent expenditure as at March 31, 2018,” said Odhiambo.

Early this year, Odhiambo asked counties to clear their debts which had put them at loggerheads with contractors, suppliers and creditors.

The letter, dated March 1, was copied to county assembly speakers.

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