Listen to This Article Enhance your reading experience by listening to this article.

Lack of financial autonomy, underfunding and continued mismanagement of assets by County Executives are slowing down the growth of towns in Kenya, a new report has revealed.

The Senate County Public Investments and Special Funds Committee, in a report tabled in the House, accused the county chiefs of stagnating the growth of developing towns, known as municipalities.

The lawmakers argue that lack of operational independence and mismanagement of assets has led to the slow growth of the towns, which are not county headquarters across the majority of the devolved units.

“The Committee observed that various municipalities lacked operational independence from the County Executive. The independence is to the management, function and finance of the towns,” reads part of the report.

The committee, chaired by Vihiga Senator Godfrey Osotsi, charged that lack of financial autonomy and independence contravenes the provisions of the Urban Areas and Cities Act, 2011.

The statute provides for the management independence, functional independence as well as the financial independence of these units.

Section 12 of the Urban Areas and Cities Act provides that a board and a manager shall run a municipality and a city.

“The management of a city and municipality shall be vested in the county government and administered on its behalf by… a board constituted and a manager,” the law states in part.

No autonomy

For instance, in Kakamega County, Kakamega Municipality had an underfunding of Sh198.52 million or 72 per cent of its projected budget and consequently lacks operational autonomy.

According to the report, the committee observed that only office operations were being carried out by the municipality board while project implementation was being carried out by the County Executive through the Department of Lands, Housing, Urban Areas Development and Physical Planning.

This, the committee observed, is in contravention of the law under the Urban Areas and Cities Act, more specifically Section 21 which gives the municipality boards executive authority as delegated by County Executives.

“The Committee recommends that the Governor of Kakamega County ensures Kakamega Municipality operational independence is fully actualised,” the report goes on to recommend.

Underfunding

Further, the Godfrey Osotsi led-committee also established that the Municipality of Eldoret lacks autonomy which is contrary to the law.

“The Committee observed that the operations of the Municipality lacked autonomy which contravenes Section 9(1) of the Urban Areas and Cities Act, 2011,” the report states.

The report further states that in 2020-21, the municipality faced an underfunding of Sh1.19 billion or 76 per cent of its budgeted amount.

As a result, the committee has recommended that the governor of Uasin Gishu, Jonathan Bii, sees to it that the municipality’s operational independence is fully actualised.

The report also shows that Kisii municipality had an underfunding of Sh46.71 million or 27 per cent of its budget.

During the probe, Kisii governor Simba Arati told the committee that the underfunding was occasioned by a review of the parent ministry funding to counties on Urban Institution Grants and Urban Development Grants.

In its observation, the Committee established that the assets belonging to municipalities were still being held and managed by the county executives.

As a result, the municipalities did not maintain and update the asset registers which was contrary to section 104(1) (h) of the Public Finance Management Act and the true financial position of the municipalities could not be reflected in the financial statements.

“Governors to ensure that municipalities have full custody of their assets by the end of the financial year 2024-025,” the committee states.

In Taita Taveta, the Municipality of Mwatate had an underfunding of Sh9.61 million or 10 per cent of the budget.

“There was an under-expenditure of Sh19.17 million or 20 per cent of the budget,” the report states.

This is the case with Trans Nzoia where the Board of Kitale Municipality also lacks independence.