Financial prudence key as counties take on more roles
Leaders at the Biennial Devolution Conference at Eldoret Sports Club in Uasin Gishu County on August 17, 2023.
As the national government moves to devolve all remaining county functions, financial challenges are likely to hamper the process.
One of the resolutions adopted at the devolution conference held last week was the transfer of all county functions currently being undertaken by the national government within the next 60 days, along with the corresponding resources.
To help ease the process, officials of different agencies that touch on devolution provided insights into how these challenges could be surmounted.
The National Treasury pledged to introduce a series of measures that will empower counties to improve revenue collection, tackle huge outstanding bills and finance functions transferred by the national government.
Treasury Cabinet Secretary Njuguna Ndung’u said the automation of the revenue collection and management systems will cushion counties from loss of funds. He also called for counties to fully utilise the Integrated Financial Management Information System (Ifmis).
“Good financial management is the cornerstone of public finance management and counties need support to have a robust integrated resource management system to deliver on their mandate,” Prof Ndung’u said at the conference.
He decried the huge outstanding bills inherited from defunct local authorities, colossal wage bills due to bloated workforces and non-remittance of pension funds by some counties.
“Counties have continued to accumulate outstanding bills, with only three counties having no arrears. They need to allocate more resources to the development budget for future economic growth,” said Prof Ndung’u.
Senators also called for the empowerment of county assemblies to play their oversight role by providing them with capacity to audit the use of public resources. They argued that financial literacy will enable members of the county assembly to ensure value for money in the implementation of projects and delivery of services.
“There is a need for county assemblies to go beyond financial statements and ensure that the public gets value for money. They need to be empowered to critically scrutinise how funds allocated to various departments are utilised,” said Homa Bay Senator Moses Kajwang', who is also the chairperson of the Senate’s County Public Accounts committee.
Commission on Revenue Allocation (CRA) chairperson Mary Wanyonyi Chebukati said weak legislation and poor revenue generation estimates were hampering service delivery for most county governments.
“Counties are still relying on old laws that expose them to litigation. This needs to be reviewed to enable the devolved units to increase their own revenue generation potential away from the National Treasury allocation,” she said.
She called for regular audits of counties’ sources of revenue and enforcement of administrative reforms to ensure proper utilisation of funds.
The chairperson of the National Assembly’s Budget and Appropriations Committee Ndindi Nyoro said the over Sh3.3 trillion disbursed to counties since the inception of devolution had spurred development.
“There is need to enact laws that support devolution and sustainable financing of county governments,” said Mr Nyoro.
Council of Governors Finance Committee Chairperson Fernandes Barasa called for adequate allocation of funds to devolved functions.
“There are a lot of disparities in financial allocations that affect service delivery by county governments. We face challenges in accessing funds and it is high time that approvals are automated for effective service delivery,” said Mr Barasa, who is also the Kakamega governor.
His Resource Mobilisation and Partnership committee counterpart Cecily Mbarire supported the call for automation.
“Automating the procurement of funds from the Controller of Budget will save time and resources,” said the Embu governor.
