Six counties defy budget chief by spending before banking

Six counties have continued to defy the Controller of Budget in spending cash raised from levies and rates before depositing the money in their main bank account.

The Controller of Budget said Nairobi, Homa Bay, Machakos, Murang’a, Meru and Trans Nzoia failed to deposit cash raised from car parks, land rates and billboards in the authorised County Revenue Fund (CRF) before its use.

The Constitution requires that all revenues generated be paid into the Fund before they are released for spending. This is in a bid to create accountability and ensure governments follow budgets.

“The office established that these counties did not deposit all locally generated revenue into the CRF as required by the Constitution, buy instead spent the funds at source,” Controller of Budget Agnes Odhiambo said in the half-year review of the counties’ budget.

This made it difficult for the budget chief to effectively monitor the expenditure of the counties, especially at onset of the spending.

“Money shall not be withdrawn from a Revenue Fund unless the Controller of Budget has approved the withdrawal,” adds the supreme law.

As a result, the six counties reported higher expenditures than the amounts approved by the Controller of Budget.

The issue of spending at source has severally been raised by the Controller of Budget Agnes Odhiambo, prompting her in last year’s third quarter report to ask that action be taken against counties for repeatedly ignoring the law.

READ: Counties to channel revenues to CBK accounts in law review

The Public Finance Management Act allows the Treasury to temporarily withhold up to half of the share of a county’s cash from the national government for devolved units that breach the law.

The report also noted that counties were doing badly in raising local revenues. In the six months to December, the 47 devolved units generated Sh13.1 billion or 21 per cent of the annual target.

Only Elgeyo/Marakwet, Marsabit and West Pokot managed to raise half of their annual local revenue target in the period to December.

Poor performers were Mombasa, Trans Nzoia and Tana River that raised 10.4 per cent, 9.3 per cent and 7.4 per cent of their annual local revenue target.

This has seen governors continue to rely heavily on the national government transfers to settle their pressing obligations, especially wages.