Late funds to blame for poor county report, governors say

Friday, June 7th, 2024 09:00 | By
Wajir governor Ahmed Abdullahi. PHOTO/Print.
Wajir governor Ahmed Abdullahi. PHOTO/Print.

Governors have faulted the latest report by the Controller of Budget (COB), saying it failed to consider the late disbursement of funds to counties by the National Treasury.

The governors said the latest County Budget Implementation Review Report uploaded this week by the COB Dr Margaret Nyakang’o failed to take into account the late disbursement of funds from the National Treasury.

The county bosses led by Wajir governor Ahmed Abdullahi said the late disbursement of funds by the national government seriously affected the implementation of development projects as well as the county government’s day-to-day operations.

 “COB approves budgets before the money is spent. She does not take into account the late disbursement of funds by the National Treasury. Here, the controller is comparing nine months of expenditure against six months of receipts,” said Abdullahi.

Pay salaries

He expressed dismay that county governments that delay paying salaries end up getting better ratings compared to that those pay salaries on time.

Abdullahi told People Daily that several counties are forced into arrangements with financial institutions to secure funds to run their operations in the event that disbursements from the national government delay.

 He stated that Wajir county government, for instance, spends Sh400 million monthly on personnel emoluments.

“You can imagine if Wajir was to delay salaries by three months, that is almost Sh1.2 billion ‘less’ on recurrent. The COB report will look super but is it logical? Would I rather starve my workers so as to look good in the COB report or pay the workers in time and get a bad report?” posed Abdullahi.

He challenged the COB to include riders in the reports taking into account several interventions that counties have put in place to cushion their workers in the event that funds delay.

“There are inherent delays in approving budgets from the Counties. COB must reduce the bureaucracies in the approval of budgets. In fact, COB demands all payment vouchers before she approves the budgets yet we are operating on a cash basis and not an accrual basis,” Baringo governor Benjamin Cheboi weighed in.

He accused the COB of usurping the functions of the Auditor General by demanding payment vouchers before approving budgets forwarded to her office by the various county governments.

“The bureaucracies by COB contribute to counties having challenges in the absorption of the funds. The disbursement schedules are not happening as they should,” said Cheboi.

This is after COB released the latest County Budget Implementation Review Report for the last nine months.

The report shows that Nairobi has spent only Sh1.25 billion on development expenditure out of Sh11.35billion, Bungoma (Sh660 million) against a budget of Sh4.48 billion, Mombasa (Sh369 million) against a budget of Sh4.4 billion and Taita Taveta (Sh163 million) against a budget of Sh2.19 billion respectively for development.

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 programs to realise their own source revenue potential. County governments should ensure that there are proper internal control mechanisms to ensure expenditure is within the approved budget and in line with approved work plans,” reads part of the report.

In the first nine months of FY 2023/24, the Controller of Budget (COB) approved the transfer of Sh223.55 billion as the equitable share of revenue raised nationally from the Consolidated Fund to the various County Revenue Funds (CRFs) per Article 206 (4) of the Constitution.

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