Economy

House team on the spot over limited revenue allocation to the counties

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National Assembly deputy Speaker Joyce Laboso. She has called on the Treasury to do proper costing of the devolved functions. FILE

The parliamentary Public Accounts Committee was Tuesday put on the spot over its failure to approve the latest revenue accounts, which has allowed the national government to keep down the share of revenue going to counties.

The Treasury has also been accused of poor costing of county functions leading to allocation of Sh226 billion to the 47 devolved units against a proposal of Sh279.1 billion by the Commission on Revenue Allocation (CRA).

Deputy Speaker Joyce Laboso described the sharing of revenue raised nationally as “haphazard” due to failure by the Treasury to cost functions and the use of outdated revenue.

“We cannot keep on budgeting for counties based on outdated audited revenue and failed costing of functions. Treasury must wake up and cost the functions already transferred,” the Sotik MP said.

The Treasury has proposed that counties be allocated Sh226 billion in the next financial year — which the Government has been telling the public is “43 per cent of national revenue”. However, this is only true when audited figures for 2009/10 are used to calculate the ratio.

Article 203 of the Constitution requires that the counties’ share of national revenue be not less than 15 per cent of the most recent audited revenue accounts approved by Parliament.

The Kenya National Audit Office has submitted audited accounts of revenue for 2011/2012 to Parliament, but MPs have so far only approved the 2009 accounts.

The accounts committee is currently inspecting the 2010/11 and 2011/12 financial years audited reports.

Budget experts said the lag in parliamentary approval could allow the national government to continue taking a disproportionately large share of national revenue.

READ: Treasury cuts counties cash to Sh217.9bn

The national government’s allocation of Sh800 billion is more than 140 per cent of the 2009/10 total revenue of Sh574 billion.

Kitui Central MP Makali Mulu urged the PAC to fast track the scrutiny and approval of the accounts to ensure that monies are shared based on the last audited reports.

The law gives the Auditor-General up to six months to prepare his reports. It was imagined that left enough time for Parliament to review and approve the reports in readiness for the next budgeting cycle. However, a backlog at the August House means there have been delays.

The counties have been allocated Sh217.9 billion, which together with Sh3.65 billion set aside for rural electrification, Sh3.74 billion for Level Five hospitals and Sh1.4 billion for youth polytechnics adds up to Sh226 billion.

If Parliament was up to speed with approving the audited books, the Sh217.9 billion that the Treasury has allocated to the counties would be reported as a quarter of the ordinary revenues for 2012/13.

The figure constitutes just 22.8 per cent of the projected Sh955.9 billion ordinary revenue expected this financial year.

While contributing to debate on the Division of Revenue Bill, 2014, the MPs said health services, rural electrification and infrastructure development will be severely affected due to lack of proper costing.

Governors have been pushing for at least 40 per cent of annual revenue, which would translate to Sh430 billion of the projected Sh1.075 trillion collection in the next fiscal year.