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Counties pending bills hit Sh165 billion

Rift Valley

Controller of Budget Margaret Nyakang'o when she appeared before the Senate Standing Committee Finance and Budget and Council of Governors at the County Hall in Nairobi on March 30, 2023. [Elvis Ogina, Standard]

Counties accumulated Sh165 billion pending bills in the last financial year, according to the Office of the Controller of Budget (CoB).

A CoB review shows Nairobi County reported the highest pending bills in 2022/2023 at Sh107.33 billion.

Elgeyo Marakwet shows the County Budget Implementation Review, had only Sh18 million yet to be cleared.

Controller of Budget Margaret Nyakang'o has advised county governments to settle the bills as a first charge on the budget in line with the law.

"Further, county governments should prepare credible budgets with realistic revenue targets. Counties should also arrange to have the ineligible pending bills examined and disposed of legally," said Dr Nyakang'o.

Other counties with pending bills above Sh1 billion each are Kiambu, Wajir, Mombasa, Murang'a, Mandera, Machakos, Kilifi, Tana River, Laikipia, Kisumu, Busia, Vihiga, Embu, Kajiado, Kisii, Narok, Trans Nzoia, Homa Bay and Taita Taveta.

The audit revealed that counties continue to spend high on personnel emoluments against the Public Finance Management (County Governments) Regulations, 2015, which sets a limit on their expenditure on wages and benefits at 35 per cent of the total revenue.

Overall, county administrations spent Sh195.09 billion on personnel emoluments, which accounted for 45.5 per cent of the total expenditure of Sh428.90 billion. This expenditure was an increase from Sh190.11 billion.

Counties further spent Sh135.83 billion on operations and maintenance while Sh97.98 billion was spent on development, a drop from Sh98.5 billion in 2021/2022.

Analysis of development expenditure as a proportion of the approved annual development budget shows that only West Pokot, Mandera, Samburu, Kericho, Nandi and Homa Bay counties had the highest absorption rates above 80 per cent.

Kilifi, Kisii, Kiambu and Nakuru counties recorded the lowest absorption rates.

The CoB revealed that personnel emoluments by Turkana, Tana River, Mandera, Kwale and Samburu counties were within the 35 per cent ceiling.

During the financial year, the county executives' budgets amounted to Sh515.18 billion.

According to the report, local revenue collected by counties rose from 35.9 billion in the previous financial year to Sh37.8 billion. This was 66 per cent of the Sh57 billion annual target.

Analysis of own source revenue as a proportion of the annual revenue target indicates that Lamu, Kirinyaga and Kitui counties outperformed their annual targets.

The report shows that 44 counties did not achieve their target, with Nyamira, Marsabit, Mandera, Murang'a, Wajir, Kisumu and Kericho recording below 50 per cent performance.

Nyakang'o noted that under-performance of revenue collection, low expenditure on the development budget, high level of pending bills, high personnel emoluments, and delay in submission of financial and non-financial reports to her office derailed effective and efficient budget execution.

She urged counties to enhance revenue collection strategies to realise the revenue targets, prioritise implementation of development programmes to improve their citizens' living standards.

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