Senators have joined governors in calling for the automation of the approval process of funds to counties by the Office of the Controller of Budget, saying the delays are affecting the flow of funds to the devolved units.
The lawmakers argued that reliance on manual systems not only hampers the processing of budget approvals, but also creates loopholes for corruption.
The situation has also resulted in billions of National Treasury releases to counties sitting idle in the County Revenue Fund (CRF) accounts at the Central Bank of Kenya (CBK).
The development follows concerns over the need for all 47 County Executive Committee members for Finance to physically travel to Nairobi with requisitions and wait for approval to access funds already released by the National Treasury.
At the county level, requisitions for the executive are made by the Finance CEC while those for the county assembly are signed by the clerk before being forwarded to the Controller of Budget for approval.
Raising the alarm, Vihiga Senator Godfrey Osotsi decried the delays in approving funds to counties by the Dr Margaret Nyakang'o-led office.
He urged the Controller of Budgets to speed up the approval process to ensure timely disbursement to enable the implementation of critical projects in the counties.
The lawmaker said the delays were severely hampering development projects in the devolved units as well as resulting in an unnecessary accumulation of pending bills by county governments.
“There is a growing concern in counties over the delays with some governors reading mischief as disbursements continue to lag,” said Mr Osotsi.
“Instead of counties sending their executive members to pursue disbursements for almost two weeks, the Controller of Budget could use digital documents to fast-track the process,” he added.
In an internal memo dated January 19, 2024, Dr Nyakang'o barred any officer in her office from signing requisitions.
The terse memo directed that all exchequer requisitions for national and county governments, whether manual or electronic, should henceforth be signed only by the Controller of Budget.
This means that in her absence, no one else in her office will approve any requisitions sent to her office by any government department.
Trans Nzoia Senator Allan Chesang' added that there is a need for automation and digitisation of services in the Office of the Controller of Budget.
He said a fact-finding tour of the counties by the Committee on Information, Communication and Technology had identified the delays and inefficiencies in the budget approval processes at the Office of the Controller of Budget as a critical bottleneck threatening the success of devolution.
The lawmaker wanted the Senate Finance Committee to investigate allegations that some officials within the Controller of Budget's office were engaging in gatekeeping practices, allegedly withholding approval of funds to counties unless illicit payments were made.
“The committee should explain why county secretaries are required to manually deliver physical documents to the Office of the Controller of Budget in Nairobi despite the presence of county representatives from the said office,” said Mr Chesang’.
The senators' concerns follow complaints by governors who accused Dr Nyakang'o of deliberately trying to frustrate the flow of funds to the counties.
The county bosses complained that delays in approving county requisitions were hampering access to county funds.
Kakamega Governor Fernandes Barasa said that although the national government disburses funds, counties take a long time to access them due to bureaucracy.
“Counties are struggling to access the funds because the Controller of Budget is taking too long to approve the requisitions made by Finance ministers from the 47 counties,” Governor Barasa said.
“We are not begging for approval of our requests, we are sounding the last warning to Dr Nyakang’o. We are going to call for the dissolution of that office to get new officers ready to protect devolution,” he added.
Kisii Governor Simba Arati also appealed to Dr Nyakang'o to act swiftly and on time in releasing funds to the counties to avoid unnecessary hardship.
Two months ago, National Treasury Cabinet Secretary John Mbadi told the Senate that the CRF account held up to Sh42.38 billion in county funds that had not been claimed by the devolved units.
He expressed concern that the funds were lying idle in the account even though some of the devolved units were on the verge of total closure due to a biting cash crunch.
“The money is there in the account. Once the money is transferred to the CRF account, it should go to counties to pay for salaries and also go into development expenditure,” said Mr Mbadi.
“We need to have a smooth absorption because the last thing you would want to see are balances accumulating in idle accounts as it adds no value to the economy,” he added.
Dr Nyakang'o has always defended her office against concerns about delays, saying that counties are to blame for misclassification of expenditure, irregular diversion of funds meant for salaries to operational expenses as major reasons for delays in approving their budgets.
“Governors breaking fiscal laws, including imprudent use of funds such as flouting the law on deduction of taxes and payment of pending bills, as well as exceeding the threshold of administrative costs contribute to the delays,” she said.
Kericho Senator Aaron Cheruiyot urged Dr Nyakang'o to address the concerns about the running of her office to address the challenges raised.
The Senate Majority Leader said he had a discussion with the Controller of Budget who told him that the delays were not only caused by her office but also the Central Bank and other institutions.
“It is my sincere hope that before we return from recess, the Speaker will convince us into a meeting and a mediation among the Council of Governors, the Senate and the Controller of Budget with regards to the success of devolution,” Mr Cheruiyot said.
“That meeting is long overdue because we have serious issues that need to be addressed. We hope that can be presented in a proper meeting where as adults we can face each other if there are legislative gaps that need to be filled up,” he added.
