The Council of Governors has dismissed a recently released report by the Controller of Budget (CoB) on the counties budget implementation for the first quarter of the 2024/25 financial year.
The report revealed that some ten counties did not spend a single cent on development in the months of July, August and September and that some counties were operating hundreds of bank accounts which CoB, Ms Margaret Nyakang’o said are being used to conceal irregular expenditures.
Council of Governors chairperson Ahmed Abdullahi said the report was meant to malign the counties by misinforming the public because the counties received money from the National Treasury in the tail end of the period under review in the report.
“For the CoB to release such a report yet she understood the situation the counties were going through was nothing but a low blow to the devolved unit, “ said Governor Abdullahi told journalists at the council’s offices in Nairobi.
He went on: “We find contemptuous, the reports of counties spending zero percent on development. As a matter of fact, counties received zero exchequer releases during the quarter. Any development done during the quarter was funded from last year's financial year arrears."
The report by the Controller of Budget (CoB) Margaret Nyakang’o stated that Nairobi, Baringo, Elgeyo-Marakwet, Kajiado, Kisii, Lamu, Nyandarua, Tana River, Uasin Gishu and West Pokot did not spend on development in the quarter ending September 2024.
The CoG boss revealed that the situation was so bad for the counties that some governors were forced to acquire loans from commercial banks to pay salaries and sustain delivery.
Whereas the money was disbursed in the last month of the first quarter of the 2024/25 financial year, no county was able to access the same by the end of the September, Mr Abdullahi, who is also the governor for Wajir said.
The allocation for July, the governor’s boss said, was released on September 24, 2024, that for August, on October 17, and that of September, the last month of the first quarter, only came on November 14.
This delay further spilled over to the second quarter with the shareable revenue for October hitting the counties’ accounts on November 18, 2024.
Governor Abduallahi explained that the delay in disbursement was occasioned by the unprecedented happening where the County Allocation of Revenue Act had not been finalized on time by Parliament. This saw the release of the funds taking longer as it only happened after the National Treasury sought an advisory from the Attorney General on how to go about the murky situation.
“You cannot spend what you do not have. This (report) has caused misleading and unwarranted agitation among the members of the public. The Controller of Budgets has continued to scandalise counties while it is aware of the challenges with delayed funds,” he said.
Nairobi Governor, Johnson Sakaja, whose county was said to have spent zero on development, also joined the bandwagon of those refuting Ms Nyakango’s report.
The County boss said that they did not receive any funds in the first two months of the quarter but that they relied on their Own Source revenue to take care of operations and maintenance as well as salaries and personnel costs.
Governor Sakaja added that the county has spent about Sh844 million in various projects across the county, including sports facilities, roads, markets, solid waste management, and emergency services.
The governor added that he had injected Sh216 million into the purchase of solid waste equipment, which Dr Nyakang’o did not capture in her report.
He also claimed that he spent Sh104 million in lighting the streets, Sh30 million to construct Gikomba market, Sh45 million to renovate Woodley stadium, and another Sh42 million to rehabilitate Joe Kadenge stadium.
On the issue of counties operating numerous bank accounts, the CoG said the counties were right within the provisions of the law, particularly Section 5 (2) of the Facility Improvement Financing Act, 2023 that says all county health facilities, having been declared entities of county governments are required to open and operate bank accounts in commercial banks for purposes of revenue retention and expenditure.
Also, when implementing projects funded from conditional grants by development partners, counties are usually required to open special purpose accounts in commercial banks for operational convenience and ensure ring-fencing of the funds for specific projects, Mr Abdullahi said.
“Based on the above, we are of the position that it is not practical for counties to operate only one account without flouting existing laws given the numerous entities, revenue collection accounts and the special purpose accounts,” he said.
The governors also took a swipe at Ms Nyakang’o saying she should refer to Article 228 (4) that “restricts her mandate ti only oversee the implementation of the budgets of the national and county governments by authorizing withdrawals from public funds under Article 204, 206 and 207”.
