Ideas & Debate

Automation way to go for counties, State agencies eyeing higher revenue collection

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Kiambu governor William Kabogo (left) with CRA chairman Micah Cheserem during the County Revenue Automation Conference in Mombasa on November 30. PHOTO | WACHIRA MWANGI

I’ve always been impressed by the team at the Commission on Revenue Allocation (CRA), and my positive view of them was reinforced when I participated in their recent County Revenue Automation Conference.

The CRA had gathered a good collection of CECs and others responsible for the finance and ICT functions, and for two days various knowledgeable speakers — including governors — led sessions on how to do a better job of generating and managing the counties’ revenues.

It was clear from the proceedings that the CRA is fully living its mandate of not just allocating national revenue among the counties but also helping to define and enhance revenue sources — from both the national and county governments. It actually led me to the thought that its name should be changed to the Commission for Revenue Stimulation, Allocation, Sharing and Utilisation!

This was the second such annual conference hosted by CRA and its objectives were to assess progress with developing devolved revenue management systems and review the security, audit and control of their financial management systems; to see how to do a better job of capturing and using data; to discuss standardisation of systems and the provision of shared services such as e-Citizen to the county governments; and to see how to deal with the challenges of change management. This last one was where I came in.

Finally, but not least, to propose ways of enhancing county revenues, and in particular through the theme of the conference: the use of ICT systems.

It was natural, therefore, for CRA to have partnered with the ICT Authority for this event, and what an excellent pair they made. I understand that the other partner being enrolled in this mission is Kenya Revenue Authority, again not surprising and also most encouraging.

Despite all the problems of launching devolution — and they have been many and major — it is good to acknowledge that remarkable progress has been made in areas such as healthcare, road construction, water supply and early childhood education, including of course in the hitherto most marginalised parts of the country.

But the counties have had a really hard time raising the resources needed to finance recurrent, never mind development, expenditure with many continuing to rely almost completely on nationally raised revenues.

But they have begun working on generating their own revenues, with some considerably more successful than others. Many still work with inefficient manual systems to collect revenues, and these are inevitably prone to leakages and mismanagement.

The conference examined how to adopt mobile and other technologies in the automation of local revenues, with some counties already implementing game-changing ICT systems.

Others, however, complained that as investments in ICT systems do not yield benefits that are immediately visible to citizens, many county assemblies are reluctant to allocate budgets for them.

And this despite the return on such investments having proved to be both swift and significant in counties that have managed to go there.

The CRA has been working closely with county governments, recommending ways of enhancing revenues from local sources such as rates, tolls, property taxes, fees and fines.

This has been by working with them to put in place relevant policies, laws and regulations, and encouraging them to automate their revenue collection.

In an ideal world, county governments should be better placed than the national government to identify local needs and deliver public services accordingly — and also to identify sources of revenue and generate the needed funds.

And despite all the weaknesses, despite attention being disproportionately focused on what is not happening, the pioneer devolved governments have been learning and doing as well as perhaps could have been expected.

Of course the counties aren’t collecting what they are supposed to, and where they are it has often led to a lack of harmonisation and a duplication of levies.

This is where ICT presents so much opportunity. We heard, for instance, from Kiambu governor William Kabogo — whose county is the role model for automation — about how increasing revenues from rates can only be achieved through mapping land and property ownership, and indeed linking such information to payment for power and water. He also spoke about collaborating with adjacent counties on harmonisation.

ICT systems are ideal for tracking improvements in service delivery and managing development projects; they are increasingly the means for issuing permits online; and of course they replace the messy manual record-keeping (or, too often and sadly, record-losing) systems.

But all this requires ICT infrastructure, both national and local; knowledgeable and skilled ICT personnel; and value-for-money procurement of ICT systems and services from reliable and ethical suppliers.

So what did the conference conclude? Not surprisingly, that significantly more resources should be allocated to ICT. To be serious about it, those present recommended that it should be at least five per cent of county budgets.

Then, ICT functions must be aligned through a single point of automation across all sectors.

Shared services and platforms should be rolled out; business and technology operations in IFMIS should be separated; a regulatory and legislative framework for managing automated revenue mobilisation and financial management must be put in place; and functional revenue automation platforms that have already been implemented by some counties should be replicated elsewhere — and as recommended by CRA, the National Treasury, the ICT Authority and other government agencies.

Inter-government systems integration would allow for shared data and hence better decision making.

We also need harmonised policies and legislation for the collection, processing and sharing of data between national and county governments and with other oversight agencies.

And finally, the management of change and the building of capacity and competence needs to be serious and continuous.

And what do I conclude? With the process of recruiting new commissioners for CRA in full swing, I hope that those who will replace the current ones will do as good a job as their founding predecessors have done.