Thirteen counties are undermining devolution by gobbling up virtually all the resources they get while ignoring development projects, Controller of Budget Margaret Nyakang’o has said.
The devolved units, a majority of which are led by first-time governors, have been faulted for spending up to 100 times on salaries and allowances compared what they invest in activities that could improve the people’s lives. The CoB added that the 13 counties’ contribution to national revenue remains frustratingly low.
In a report by the CoB detailing how counties utilised funds between July and December 2021, Vihiga, Samburu, Nyandarua, Lamu, Wajir, Machakos, Busia, Meru, Garissa, Nandi, Siaya, Murang’a and Kajiado counties are ranked as the worst performers, with low amounts of own source revenue (OSR), while ironically spending well over 80 per cent of their revenues on recurrent activities.
Vihiga County leads the pack with a recurrent spending of Sh1.4 billion in the six months against Sh14.5 million development expenditure.
This implies that the county’s spending on personnel emoluments and activities such as travel was more than 99 times what it spent to finance development projects, or 99 per cent of its entire spending in the half-year.
The county, whose Governor Wilbur Ottichilo is serving his first term, also recorded low levels of OSR at 22 per cent (Sh52 million) of the targeted revenues this year, when it should have collected at least Sh116 million.
Samburu County, whose Governor Moses Lenolkulal is serving his final term in office, spent on recurrent items 22 times what it invested in development projects, with its recurrent spending accounting for 95.8 per cent of the entire expenditure.
“The funds available to the county governments in the first half of FY2021/22 amounted to Sh195.7 billion. This amount consisted of Sh144.9 billion equitable share of revenue raised nationally and disbursed by the National Treasury, Sh36.6 billion cash balance from FY2020/21 and Sh14.06 billion raised from own sources,” Dr Nyakang’o stated.
The CoB report noted that only Homa Bay and Migori collected the required OSR during the period.
“Conversely, counties that recorded the lowest proportion of own-source revenue against annual targets were Murang’a at 11.5 per cent, Kajiado at 13.8 per cent and Busia at 14.2 per cent,” the report added.
Counties are expected to collect at least half of their annual targets between July and December and then collect the remaining half between January and June if their systems and projections work effectively.
The 47 counties generated a total of Sh14.06 billion in OSR, which works out to 24.3 per cent of the annual target of Sh57.8 billion.
The Lamu County government spent 93.8 per cent of its funds on salaries, allowances, travel and other recurrent items and only Sh72 million to finance development for six months. The county collected 42 per cent or less than half of the targeted Sh120 million in OSR.
Wajir County spent 15 times on recurrent items what it invested in development activities. Its OSR collection – Sh15.5 million – was the lowest countrywide. The county targets to collect Sh100 million in OSR by June 2022, but based on the performance in the first half, this is a tough call.
Governor Alfred Mutua’s Machakos County spent a total of Sh4.2 billion to finance recurrent activities, including Sh3.8 billion on personnel emoluments, but development took up Sh322 million for the entire six months. This means the county spent 14 times on recurrent activities what it injected into development projects and activities.
“County governments that reported the highest development expenditure as a proportion of approved annual development budget were Marsabit, Kitui and Mandera at 35.5 per cent, 31.7 per cent and 31.7 per cent respectively. Counties that reported the lowest absorption rates for the development budget were Samburu at 2.6 per cent, Taita-Taveta at 1.6 per cent and Vihiga at 0.7 per cent,” Dr Nyakang’o said.
Overall, the 47 counties spent Sh90.7 billion (56.9 per cent) on personnel emoluments, Sh42.8 billion (26.9 per cent) on operations and maintenance and Sh25.9 billion (16.3 per cent) on development.
Nyandarua, whose Governor Francis Kimemia is serving his first term, spent Sh1.9 billion on recurrent items, including Sh1.2 billion on personnel emoluments. This saw the devolved units spending on activities that do not directly spur the economy constitute 94 per cent of its total expenditure.
Meru County spent 11 times on recurrent activities what it spent on development, while its OSR collection was a mere 20 per cent of the annual targets, at Sh143 million.
“To address the identified challenges, the Controller of Budget advises counties to review the revenue targets to confirm that they are realistic and implement strategies to mobilise their own source revenue collection. On low development expenditure, county governments should prioritise implementation of development projects in the remaining period of the FY2021/22 to improve the standards of living for their citizens and ensure that expenditure on development activities meets the minimum set ceiling of 30 per cent of their budgets,” Dr Nyakang’o recommended.
She added: “Counties should ensure that spending 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.”
Counties have a budget of Sh517.6 billion this financial year, with Sh192 billion intended to fund development activities and Sh325 billion for recurrent expenditure.
