CoB fingers four counties with low budget absorption

Bungoma, Nairobi, Mombasa and Taita Taveta county governments had the lowest absorption rates in their respective approved development budgets, a new report has revealed.

The Controller of Budget (CoB) in her latest County Governments Implementation Review Reports for the last nine months of the 2023-2024 financial year shows Bungoma’s development record stood at 11.7 per cent, Nairobi City at 9 per cent, Mombasa at 7.7 per cent and Taita Taveta at 7 per cent respectively.

The report shows that Nairobi has spent only Sh1.25 billion on development expenditure out of Sh11.35 billion, Bungoma (Sh660 million) against a budget of Sh4.48billion, Mombasa (Sh369million) against a budget of Sh4.4billion and Taita Taveta (Sh163million) against a budget of Sh2.19 billion respectively for development.

This even as the report shows that the total expenditure by county governments in the first nine months of FY 2023/24 was Sh274.08 billion, representing an absorption rate of 48.5 per cent of the total annual county governments’ budget of Sh564.53 billion.

Development expenditure

The report released yesterday, shows that the development expenditure for the County Governments in the first nine months of 2023/24 financial year amounted to Sh44.89 billion, translating to an absorption rate of 22.1 per cent.

A review of cumulative expenditure by economic classification showed that Sh146.53 billion (53.5 per cent) was spent on Personnel Emoluments, Sh82.65 billion (30.2 per cent) on Operations and Maintenance, and Sh44.89 billion (16.4 per cent) on Development Expenditure.

However, Narok, Bomet, Uasin Gishu, Mandera, and Kitui Counties achieved higher absorption rates of their respective approved development budgets at 54.4 per cent, 48.8 per cent, 41.5 per cent, 38 per cent and 36.6 per cent respectively.

CoB Margaret Nyakang’o in her report revealed that the County Governments’ recurrent expenditure during the period amounted to Sh229.18billion, which was an improvement of 9.2 per cent compared to a similar period in 2022/23 Financial Year.

Of the amount, some Sh146.53billion (63.9 per cent) was used for personnel emoluments; Sh82.65 billion (36.1 per cent) for operations and maintenance while the Ward reps spent Sh1.09 billion on their sitting allowances.

“The total expenditure by the County Governments in the period amounted to Sh274.08 billion. This expenditure included Sh229.18 billion (83.6 per cent) for recurrent activities and Sh44.89 billion (16.4 per cent) for development activities,” the report reads in part.

County governments’ budget

The expenditure represented 48.5 per cent of the annual County Governments’ budget and showed improvement compared to the same period in FY 2022/23 when the cumulative expenditure was Sh239.67 billion.

According to the report, Uasin Gishu (59.9) Kitui  (59.8), Narok (58.8), Bomet (58.6), Nandi (57.9), and Isiolo at 57.5 per cent respectively, while others like Garissa, Kisumu, Migori, Siaya, Bungoma, and Kisii counties recorded the lowest aggregate absorption rates at 43.5, 43.1, 42.9, 42.8, 38.3 and 37.3 per cent respectively.

Based on the findings, COB now recommends that to improve budget implementation, County governments should ensure that expenditure on personnel emoluments is contained at sustainable levels and in compliance with Regulation 25 (1) (b) of the Public Finance Management (County Governments) Regulations, 2015.

In addition, Nyakang’o charges that County Executive Committee Members responsible for Finance should follow up and ensure compliance with the law by maintaining bank accounts at the Central Bank of Kenya for accountable spending.

“The County governments should build the capacity of key staff involved in revenue collection and implement revenue enhancement programmes to realize the Own Source Revenue potential. County governments should ensure that there are proper internal controls mechanisms to ensure expenditure is within the approved budget and in-line with approved work plans,” reads part of the report.

Nyakang’o further recommends that County Governments should settle the eligible pending bills as a first charge on the budget in line with the law.

During the reporting period, County governments generated a total of Sh41.40 billion from their own source revenue (OSR), which was 51.3 per cent of the annual target of Sh80.78 billion.

The realized OSR is an improvement compared to Sh28.77 billion generated in a similar period in FY 2022/23.

Analysis of own-source revenue as a proportion of the annual revenue target indicated that 12 counties Uasin Gishu, Samburu, Isiolo, Kirinyaga, Turkana, Nandi, Vihiga, Meru, Wajir, Narok, Nyeri, and Elgeyo-Marakwet achieved a performance of above 75 per cent of the annual target.