Mr Henry Rotich, Treasury Cabinet Secretary. PHOTO | FILE
The county governments will be allocated Sh245.5 billion in the next fiscal year, up 7.1 per cent from the year ending in June.
In the 2014/15 fiscal year, the devolved entities received Sh229.3 billion from national government. This amounted to 24 per cent of the total government revenues of Sh954.1 billion.
According to the preliminary budget estimates for 2015/16, the proportion of allocation to the counties will however fall marginally to 22.1 per cent of the total revenues, which are expected to be Sh1.109 trillion.
Allocations though have often been hit by delayed audits meaning counties take less than intended.
But the Treasury said despite the allocation of Sh229.3 billion in the past fiscal year, county governments did not spend 42 per cent of the cash they were supposed to access.
According to the estimates, county governments spent 58 per cent or Sh133 billion out of the total allocation. “In this first year, budget execution by county governments was well below target. Counties managed to spend only 58.1 per cent of their aggregate budget,” said the Treasury in the preliminary estimates.
Despite the low absorption, governors around the country are pushing for no less than 45 per cent of the total national revenues. The Council of Governors chairman Isaac Ruto has vowed to go for a referendum if need be, in a campaign dubbed “pesa mashinani” (more cash to the counties).
For the push to be succeed, it must be supported by one million signatures upon which the Council of Governors will draft a bill which must be passed by at least half of the county assemblies before proceeding to the Senate and the National Assembly.
If both Houses of Parliament approve the Bill, no referendum will be needed, but if they disagree, a referendum will decide the matter.
A 45 per cent allocation would mean Sh499 billion in the fiscal year 2015/16 which is nearly four times the Sh133 billion they actually spent in the past fiscal year.
The Treasury said counties experienced teething problems such as inability to use the Integrated Financial Management Information System (IFMIS) besides conflicts between the executive and members of county assemblies.
“This was the result of many teething problems associated with the setting up of new structures. These challenges included infrastructural challenges, particularly, in IFMIS, inadequate staff capacity,” said the Treasury in the preliminary estimates. There were also delays in release of funds.
“The majority county government funds were also used for recurrent rather than development expenditure. … This goes against the Public Finance Management Act which stipulates that at least 30 per cent be allocated to development,” said the Treasury.
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