Treasury cracks down on fuel guzzlers for county chiefs

Top county government officials are set to lose the luxury of being chauffeured in fuel guzzlers following the publication of new regulations capping the capacity of cars they can buy.

The regulations, which Treasury secretary Henry Rotich tabled in Parliament on Tuesday, limit the capacity of vehicles driven by governors, county executives and county representatives at 3000 cc.

The Public Finance Management (County Government) Regulations 2015 restrict governors to using saloon cars not exceeding 2600 cc and 4X4 utility vehicles of not more than 3000 cc.

The capacity of official vehicles purchased for use by deputy governors, speakers of county assemblies and county executive committee members has been capped at 2400 cc for salon cars and 3000 cc for 4X4 utility vehicles.

“There is need to ensure prudent use of public resources in line with Article 201 of the Constitution by providing ceilings in both the Public Finance Management Act, 2012 and PFM (County) Regulations, 2014 for expenditures of county assemblies,” Mr Rotich says in the explanatory memorandum accompanying the regulations.

The rules, published in a special gazette notice number 33 dated March 20, 2015, are aimed at curbing wasteful expenditure in the 47 county governments.

They will come into effect after 15 days of submission to Parliament whether or not the committee has considered them, raising the question as to what the county governments that already own the fuel guzzlers will do with them.

The new rules also bar Members of County Assemblies (MCAs) from fundamentally altering annual budgets submitted by county executives.

The MCAs, who have been holding governors to ransom on budgets, will only be allowed to vary a budget or any vote in the budget by an amount not exceeding one per cent of the budget or the vote amount.

Mr Rotich is also asking for Parliament’s approval to cap the compensation of national and county government employees at 35 per cent of the equitable revenue shared at both levels.

The Treasury is specifically targeting the profligacy of county assemblies with a new rule that caps their spending at seven per cent of total county revenues.

“The approved expenditures of a county assembly shall not exceed seven per cent of the total revenues of the county government or twice the personnel emoluments of that county assembly, whichever is lower,” the new rule states.

The rule is expected to hit the MCAs hard by limiting the types and amounts they can receive in allowances and could bring to an end the wastage that has characterised their spending since the county governments were established two years ago.

READ: Auditor probes MCAs’ Sh3.71bn travel allowances

The subsidiary legislation also stipulates that the national public debt shall not exceed 50 per cent of the gross domestic product (GDP) in terms of net present value.

Kenya’s public debt, though still below the target, has rapidly risen in the past couple of years and has only benefited from the fresh computation of economic data or rebasing that increased the GDP by 25 per cent. Public debt is currently estimated to stand at 46 per cent of GDP.  

The new rules also seek to empower the Treasury secretary to provide further guidelines for loans and advances, including benefits and allowances for public officers and county executive committee members for finance who may provide further guidelines for their respective counties in line with the Treasury’s.

Chief officers, clerks of county assemblies and other officers in job group R and chief executives of county corporations will not be allowed to use vehicles that exceed 2000cc for saloon cars and 2900cc for 4X4s.

The regulations empower a county committee member to give a gazette notice of specific category of officers and vehicles to be used by those public officers.

The rules limit the amount of money that a county can borrow within and outside Kenya to not more than 20 per cent of the county government’s most recent audited revenues as approved by the county assembly.

In addition, the annual debt service cost of a county government is limited to not more than 15 per cent of the most recent audited revenue as approved by the county assembly.

“Parliament may review the limit under this paragraph of this regulation five years after its commencement,” Mr Rotich says.

The coming into force of the rules will also require county governments to hold bank accounts at the Central Bank of Kenya except where the Cabinet secretary has expressly granted exemption.

Counties will be allowed to draw 50 per cent of their budget estimates before approval by assemblies under extreme circumstances.

The regulations also provide for the establishment of a Sinking Fund for county government debt redemption and sets criteria for establishment of public funds, management and winding up of a county public fund.

The criteria for establishment and dissolution of a county corporation as well as evaluation of performance are also set out in the new law.