Budget left out three key areas

In view of the contested election date, the Budget has been prepared without a specific date in mind and as if the counties were already in existence, with allocated funds still remaining within the budgets of the line ministries under the heading “counties”.

This was a necessary since Kenya is still in the process of implementing the Constitution.

A lot of progress has been made in all aspects of implementation. It is a lengthy process and many of the Constitution’s chapters and articles require further legislation to make them effective.

The 2012/2013 Budget makes provision for the cost of new commissions required by the Constitution like those concerned with revenue allocation and salaries and remuneration.

Each commission has a unique and separate function and we can expect a lot of activity this year as they start to fulfil their mandates.

Altogether, the Budget would allocate 18.9 per cent of nationally collected revenues to implementing the Constitution in 2012/2013 and just over 19 per cent for each of the next two years.

These amounts are significantly greater than the 15 per cent minimum set out in the Constitution but these amounts are still insufficient to fund the requirements of the counties.

The allocation for implementing the Constitution is divided into two parts. First, it funds the cost of elected representatives’ salaries and remuneration as well as basic operational costs. Second, the Budget allocates money to devolved government operational expenses.

Each ministry ultimately affected by the devolution has set aside funds for meeting operational expenses for the counties during the year.

This includes secondment costs for national ministry staff who are providing essential services for the orderly start up of county administration.

There is a three-year window for full implementation and the devolved powers and functions set out in the fourth schedule of the Constitution are only likely to start from July 1, 2013. Power will be transferred slowly.

Despite these allocations, three important areas that have not been provided for in the Budget and which will impact successful and sustainable county operations.

The first is the cost of clearing the significant backlog of audits and asset and liability verifications so that the counties can start up with the necessary confidence. Many administrative activities are still handwritten and the task of clearing this backlog is complex and expensive.

The second is the cost of funding the large number of counties that are not financially viable at the outset. A financial modelling exercise spread over different types of counties would help to estimate the extent of the financial burden.

The third is the cost of developing the necessary skills capacity so that counties can assume their devolved functions in a sustainable manner.