Report reveals irony of counties spending more than they earn

Homa Bay Governor Cyprian Awiti. His county government struggles to collect more revenue amid a growing wage bill. [File, Standard]
A report by the Controller of Budget has revealed worrying statistics on revenue collection in Kisumu and Homa Bay counties.

This, even as the two counties continue to spend more on staff salaries and allowances.

According to the report, Kisumu County’s revenue declined by Sh32 million, falling from Sh876 million, collected between July 2017 and June 18, to Sh842.82 million, collected between July 2018 and June 2019.

The gloomy statistics are expected to pile more pressure on Governor Anyang’ Nyong’o’s administration which has lost several revenue streams in the past three months.

SEE ALSO :Senators in last-ditch bid to resolve impasse on sharing of county cash

Recent demolition

More than 10,000 revenue-paying traders have lost their businesses following recent demolitions in Kisumu city. Most of them are yet to get alternative shops.

Acting Controller of Budget Stephen Masha said under-collection of local revenue was hampering implementation of the county's budget.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.

During the period under review, the county government imposed a host of taxes to boost its revenue, including those targeting the booming boda sector.

The new taxes included a Sh20,000 licensing fees for new hotels, tea houses, snack bars and other eateries.

SEE ALSO :Pay mama mbogas, departing budget boss tells governors

In addition, the county introduced a Sh500 fee per training session for teams using Jomo Kenyatta grounds.

But the new levies did not seal the revenue gaps which were further affected by an increased wage bill. 

During the period under review, Nyong’o’s government increased its expenditure on wages by 2.5 per cent, spending Sh3.6 billion on salaries.

Between them, the county assembly and Nyong'o's administration spent Sh265 million on foreign trips which represented an increase of about Sh105 million.

Nyong’o’s government is also grappling with growing debt, with the Controller of Budget indicating that as at June 30, 2019, the county had bills totalling Sh933 million.

SEE ALSO :Tolgos and MCAs reach deal to unlock budget stand-off

Homa Bay is also struggling to collect more revenue amid a growing wage bill.

Although the country collected Sh101 million between July 2018 and July 2019-a Sh4.97 million drop compared to 2017/2018, it spent Sh3.1 billion on salaries.

The county was rated fourth nationally in the list of counties that spent enormous parts of their budgets on salaries.

Additionally, the Homa Bay county assembly was cited for paying ward reps excessive allowances.

Although the Salaries and Remuneration Commission (SRC) set the allowances of ward reps at Sh124, 800, Homa Bay ward reps pocketed Sh148, 214.

SEE ALSO :Should KRA collect taxes on behalf of counties as proposed by Odhiambo?

Nyamira and Migori county assemblies were also found to have violated the law in ward rep allowances.

Nyamira paid ward reps Sh150,097 million in allowances while Migori spent a total of Sh59 million without a budget allocation.

Topped list

In Nyanza region, Migori topped the list of counties that improved their revenue collection after collecting Sh380 million. The figure represented an increase of Sh157.5 million.

Siaya County, which has also been in the spot over poor collections in past reports, increased its collection by Sh50 million. The county collected Sh189.6 million up from Sh139 million collected in the 2017/2018 financial year.

Kisii County increased its revenue by Sh74.6 million while Nyamira increased its collection by Sh68.8 million.

Kisii collected Sh330.9 million while Nyamira collected Sh165.4 million.

Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.

Controller of BudgetKisumuHoma Bay