Three counties have been flagged for disregarding rules on the management of public funds over the first decade of devolution.
The Parliamentary Budget Office (PBO)-- the professional unit which advises lawmakers on financial and economic matters—says Vihiga, Nairobi, and Kisumu retained a consistent record of flouting rules on public finance management.
The PBO in a budget review report for October notes that the Auditor-General’s office, has between 2013 and 2020, consistently raised concerns about reporting and management of finances by the three counties, giving them either adverse or disclaimers of opinions in the audit reports.
“Since 2013 to 2020, the three counties have only achieved a disclaimer or an adverse opinion,” the PBO report states.
This means that the counties either could not provide evidence of how they spent monies they collected or received from the exchequer on a large scale to the extent of denting service delivery to residents. Failure to provide documents to the Auditor-General also points to possible misuse, wastage, or stealing of public funds.
The PBO notes that since the onset of devolution, only two counties have provided enough evidence on how they spent public money, to warrant an unqualified opinion by the Auditor-General, which implies the highest level of proper spending.
Between 2017 and 2018, Muranga and Nyandarua counties properly managed their funds as per their records and got an unqualified opinion.
The PBO, however, notes an improvement in financial reporting by counties, which has seen more devolved units get better scores from the Auditor-General. It notes that while only five counties got either adverse or disclaimer opinion in the financial year of 2019/20, the number had been high at 45 counties in the first year – 2013/14.
The PBO calls on counties to keep an eye on “The implementation of the recommendations made by watchdog committees on the Auditor General’s reports, particularly on the capacity of County Treasury officers to comply with the law.”
By June last year, the National Treasury stated that it had released a total of Sh2.4 trillion to counties, with Nairobi receiving the highest amount of Sh115.5 billion since 2013, and Sh21.1 billion in the FY2020/21 alone.
“The aggregate payments to county governments in FY2 2020/21 amounted to Sh398.9 billion, which included Sh29.7 billion accruing balances from the allocation for FY 2019/20 and Sh4.6 billion for the Kenya Devolution Support Programme (KDSP) Level 2 programme, which were not part of the County Allocation Revenue Act (CARA), 2020 allocation,” Treasury stated.
