Get sustainable county revenue-share formula
What you need to know:
- This treacherous path was not necessary and should provide vital lesson on the management of county revenues.
- A guiding principle is that funds should be proportionate to the functions allocated to either national or county governments.
Finally, counties will receive their financial allocations this week after a four-month deadlock that nearly grounded their operations. At the centre of the dispute was the formula for sharing the cash that had been proposed by the Commission for Revenue Allocation, which the Senate rejected severally on grounds that the criteria was punitive and bound to deprive some counties of revenues they have always received in the past.
It was not until President Uhuru Kenyatta intervened by promising increased allocations to the counties in the next financial year did the stalemate end. Senators subsequently passed the motion and allowed the government to disburse the money.
This treacherous path was not necessary and should provide vital lesson on the management of county revenues. Extensive consultation is crucial at every stage, right from the design of the formula to allocation of the cash. A guiding principle is that funds should be proportionate to the functions allocated to either national or county governments.
The experience draws attention to some pertinent issues on county funding. First, although the Constitution stipulates that counties should be allocated at least 15 per cent of the most recent audited revenues collected by the national government and approved by the National Assembly, the reality is that there is huge backlog of the audits. Consequently, old and unrealistic figures are used to determine the allocations, denying them optimal resources they are entitled to. The national audit office and Parliament should expedite this task.
Second, the objective of devolution was to enable counties to determine their destiny, among others, through harnessing own resources to secure financial stability. Hardly has this happened. Counties depend on subventions from the national government. Moreover, they have become wasteful and t emerged as hubs for corruption. The imperative for counties to be productive and frugal is incontestable.
After seven years, devolution should have matured and its supportive systems must, therefore, work.
