16 January 2014

Kenya: Criticism Builds Over Spending Practices of Kenyan Counties

Nairobi — The latest report by Kenya's Controller of Budget portrays questionable spending practices in Kenya's counties, including high percentages spent on salaries, travel and conferences, and disappointing spending on development programmes.

The County Budget Implementation Review report, which covers the first quarter of the 2013-2014 fiscal year, raised some eyebrows when it was released to the public January 8th.

The report revealed that county governments spent 13.33 billion shillings ($155.2 million) from July to September 2013. These expenditures were classified into four categories: personnel emoluments, operations and maintenance, development, and servicing of debts and pending bills.

Of the total spending, 55% went towards personal emoluments, 38% for operations and maintenance, and only 7% towards development programmes.

Out of Kenya's 47 counties, 27 spent no money on development projects. The other 20 counties spent 872.9 million shillings ($10.2 million) on development activities, with the highest ratio of development expenditure to total expenditure in Nyeri (30.3%), Tana River (26.0%) and Tharaka Nithi (25.5%).

The report also found that the counties spent 1.1 billion shillings ($12.4 million) on domestic and foreign travel, 241.9 million shillings ($2.8 million) on conferences, and 161 million shillings ($1.9 million) on training.

Odhiambo critical of findings:

Controller of Budget Agnes Odhiambo criticised these findings, saying governors must place a higher priority on development projects.

She said the audit revealed that county governors had spent substantial amounts of money allocated to them from the National Treasury on unnecessary expenses like travel, personal emoluments, allowances, training and conferences.

"This left many counties with no or little funds for development, meaning the governors prioritised unnecessary expenditures rather than development, which is contrary to the Public Finance Act that requires that counties must commit 30% of their budgets on development projects," she told Sabahi.

Among those counties the report cited for questionable spending practices are West Pokot, Kisumu and Kisii.

The report shows that West Pokot spent 37.7 million shillings ($437,000) -- or 81.4% of its total budget -- on personal emoluments, while Kisumu spent 268 million shillings ($3.1 million) -- or 79.3% -- on the same.

Kisii spent 174.4 million shillings ($2 million) -- or 83.7 % -- of its budgetary allocation on personal emoluments, 34 million shillings (394,000) on operations and maintenance, and 15 million shillings ($174,000) on travel.

Mombasa County faced other spending concerns. Of Mombasa's total spending, 72% went to personal emoluments, 25% on operations and maintenance and 3% on debt repayment.

Under its operations and maintenance spending, the report found that Mombasa spent 22 million shillings ($256, 000) on travel costs and subsistence allowances, 16 million shillings ($186,000) on training, and 13 million shillings ($151,000) on conferences, hospitality and catering. The remaining balance was spent on other categories such as fuel costs, printing and other allowances.

The county received 545 million shillings ($6.3 million) for recurrent expenditures, but spent 767.2 million shillings ($8.9 million) -- exceeding its approved expenditures by more than 221 million shillings ($2.6 million).

A worrisome trend:

Wanjiru Gikonyo, national co-ordinator for The Institute for Social Accountability (TISA), a civil society group, said the county governors' spending was a worrisome trend.

"If Kenyans have to realise any benefits of devolution, which was to bring resources and services closer to the people, then funds should be committed to development projects, unlike what we are seeing today where governors have misplaced priorities," Gikonyo told Sabahi.

She said that for all regions of the country to develop uniformly, counties should prioritise development agendas, such as building roads, markets, schools and dams for irrigation to boost food production.

"To make farmers able to supply produce in the market faster and easily, the solution does not lie in buying four-wheel-drive vehicles, but it is in the building of good road networks that will help them move with ease and at a cheaper cost," she said.

Senate Majority Leader Kithure Kindiki also criticised the governors' spending and said he planned to push for amendments to the Public Finance Management Act that will ensure that the bulk of the allocations to counties are used for development projects.

"We have seen there is no fiscal and monetary discipline in the counties, therefore for us to be able to enforce discipline and make sure [we] end this un-prioritised spending, we are going to change the law by setting that 60% should be the minimum threshold of the total allocation [for the] development budget," Kindiki told Sabahi.

Due to the spending models adopted by the governors, they are unable to offer services to the public, Kindiki said, adding that in the future, governors will be accountable to the Senate for the money allocated to them.

Mismanagement of funds or business as usual?

But Council of Governors Chairman Isaac Ruto defended the spending, saying the report covers a transitional period and is not an accurate assessment of future spending patterns.

Ruto explained that the report covered a period when there were fewer activities in the counties and that most counties had embarked on recruiting staff to help implement county programmes.

"The money for development was sent to counties in September and received by counties between October and November, therefore it was hard to have been spent by the time the report was being compiled," he told Sabahi. "Furthermore, many of the counties' projects they are talking about were at the tendering stage."

Ruto added that most of the money that was received was used to pay for salaries because counties had inherited staff from the previous local authorities and for conferences as they had to take the staff for refresher training to orient them with the new workings of the devolved governments.

"Some of us were visiting countries abroad to learn about best practices ... we could not just begin rolling out programmes without getting expertise knowledge from the countries that have devolution. These trips were necessary," he said.

Ruto said the report gives an unfair impression of the governors' priorities.

"This is a scheme to portray us as not development conscious, which is a large ploy to discredit the devolved units so they can use that as a basis to deny us money in the coming financial year," he said. "These are enemies of devolution."

Odhiambo, however, denied Ruto's claims.

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