A quarterly report by the controller of budget has revealed how counties have irregularly exceeded the expenditure limit on sitting allowances for Members of the County Assemblies (MCAs) barely three months into the financial year.
According to the First Quarter County Governments Budget Implementation Review Report (CBIRR) for FY 2017/18, which examines the budget performance by the forty seven counties for the period July to September 2017, the County Assemblies incurred Kshs.152.39 million on MCAs committee sitting allowances against an approved budget allocation of Kshs.3.03 billion, which translates to 5.0 per cent of the approved MCAs committee sitting allowance budget.
The report however observes, even though the expenditure is high, it’s a decline from 19.1 per cent attained in FY 2015/16 when Kshs.638.32 million was incurred.
High expenditure on personnel emoluments, under-performance of local revenue collection, IFMIS connectivity challenge and frequent downtime, low expenditure on the development budget, and failure to budget for all revenue sources as contained in the County Allocation of Revenue Act (CARA), 2017, and delay by the National Treasury to disburse the equitable share of revenue raised nationally were identified as the challenges that continue to hamper effective budget implementation in the counties.
MCAs SITTING ALLOWANCES
County Assemblies that reported higher expenditure on committee sitting allowance than the SRC’s recommended monthly maximum of Kshs.80, 000 were: Bungoma at Kshs.112,491 and Taita Taveta at Kshs.92,131.
DOMESTIC AND FOREIGN TRAVEL ALLOWANCES
The County Governments incurred Kshs.1.02 billion on domestic and foreign travel against an approved annual budget allocation of Kshs.9.69 billion.
Narok County incurred the highest expenditure of domestic and foreign travel at Kshs.92.31 million, followed by Kiambu and Homabay at Kshs.56.13 million and Kshs.53.87 million respectively.
“Analysis of expenditure on domestic and foreign travel as a proportion of budgetary allocation indicated that Kiambu, Homa Bay and Kajiado Counties had the highest proportion at 50 per cent, 31.9 per cent and 30.7 per cent respectively,” the report states.
HIGH EXPENDITURE ON PERSONNEL EMOLUMENTS
The County Governments incurred an aggregate of Kshs.27.75 billion on personnel emoluments (PE) in the first quarter of FY 2017/18, which accounted for 78.3 per cent of the total expenditure for the period and 50 per cent of the total funds available to the Counties.
The report warns that if not addressed, the high expenditure on Personnel Emoluments could hinder the implementation of other county programmes.
“Although this expenditure is a decrease of 6.3 per cent from Kshs.29.6 billion incurred in the same period of FY 2016/17, it remains high, when compared with the set ceiling on the County Governments’ expenditure on wages at 35 per cent of the total revenue, and will therefore limit implementation of other county programmes if not addressed,”.
COUNTY ALLOCATION FY 2017/18
In FY 2017/18, the combined County governments’ budgets approved by the County Assemblies amounts to Kshs.374.68 billion and comprised of Kshs.239.9 billion (64 per cent) allocated to recurrent expenditure and Kshs.134.78 billion (36 per cent) for development expenditure.
To finance the FY 2017/18 Approved Budget, County Governments expect to receive Kshs.302 billion as equitable share of revenue raised nationally, Kshs.23.27 billion as total conditional grants from the National Government, Kshs.16.41 billion as total conditional grants from the Development Partners, and generate Kshs.55.92 billion from local sources, and Kshs.25.17 billion cash balance from FY 2016/17.
COUNTIES FAIR DISMALLY IN REVENUE COLLECTION FY 2017/18
Despite the high expenditure on sitting allowances and personal emoluments, the report by the controller of budget reveals that counties have under-performed in revenue collection.
“The local revenue collection was below the expected performance of 25 per cent of the annual target, and implies that some planned activities may not be implemented due to insufficient funding,” the report reads in part.
The First Quarter FY 2017/18 County Budget Implementation Review Report (CBIRR) is prepared in fulfillment of Article 228(6) of the Constitution of Kenya, 2010 which requires the Office to report on the implementation of the budgets of both the National and County Governments.