Siaya, Nakuru and Nyandarua counties spent less than 10 percent of their planned annual development budget in the first nine months of 2018/19 fiscal year, hurting momentum of economic activity and job creation for a growing unemployed graduate youth population.
Statistics by the Controller of Budget Office (CoB) indicate that Siaya spent Sh179.3 million of its development budget of Sh3.7 billion, translating to an absorption rate of five per cent.
On the other hand, Nakuru and Nyandarua spent Sh751.5 million and Sh302.6 million of their development budget of Sh8 billion and Sh3.2 billion respectively.
This means the two counties only spent 9.4 percent and 9.5 percent of their development budgets in the nine months (July 2018-March 2019), correspondingly -- a trend that could see them spend less than half the budget end of June 2019.
Narok recorded the highest absorption rate of 57 percent followed by Murang’a, 44.5 percent and Kakamega 44.1 percent.
Development spending is critical to creating assets that will provide long-term public goods, including roads, hospitals, schools and airports.
“Kakamega County recorded the highest expenditure on development activities at Sh2.95 billion, followed by Mandera County and Nairobi County at Sh2.83 billion and Sh2.32 billion respectively,” the CoB report said.
The government’s quest to speed up economic growth has been hitting strong headwinds as most counties fail to spend development funds as budgeted.
Overall, the devolved units incurred a paltry Sh46.5 billion out of Sh190.9 billion earmarked for development expenditure in the financial year ending June.
This was barely 24.4 percent, way below the annual planned development budget.
The CoB suggests that counties may be having misplaced priorities while executing their budgets.
“Counties should rationalise expenditure on non-core activities, such as travelling, in order to free funds for key development programmes,” the report says.
Statistics further shows that the county governments spent Sh120.54 billion on personnel emoluments, representing a 52.3 per cent of total expenditure.
This was an increase from Sh108.04 billion incurred in the first nine months of FY 2017/18.
Further analysis indicates that the County Assemblies spent Sh1.55 billion on MCAs committee sitting allowances against an approved budget allocation of Sh2.71 billion.
Garissa and Tana River County Assemblies reported highest expenditure on members of county assembly’s sitting allowance.
MCAs in the two counties took home an average monthly sitting allowance of Sh125,381 and Sh183,382 per member respectively, defying the Salaries and Remuneration Commission (SRC) recommended monthly ceiling of Sh124,800.
Migori County Assembly reported an expenditure of Sh38,704,900 on sitting allowance, without a budget allocation for this expenditure in the Approved Budget.
Baringo County paid its MCAs the lowest monthly sitting allowance of Sh9,875.
The report identifies high expenditure on personnel emoluments and travel as one of the main challenges faced by county governments, which increased significantly compared to previous periods.
“County Governments should establish optimal staffing levels to ensure that personnel costs are sustainable and within the set limit of 35 percent of a County’s total revenue,” says the report.
In the first nine months of fiscal year 2018/19, the CoB approved transfer of Sh200.89 billion from the Consolidated Fund to the various County Revenue Funds (CRFs) as equitable share of revenue and conditional grants to Level 5 hospitals in accordance with Article 206 (4) of the Constitution.
During the same period, the devolved units received Sh1.58 billion for Transforming Health Systems for Universal Care Project from the World Bank and Sh11.46 billion credit from the World Bank’s International Development Association (IDA) for the Kenya Urban Support Project (KUSP).
Further, the counties got Sh1 billion from IDA for the Kenya Climate Smart Agriculture Project (KCSAP), Sh.1.04 billion from Danida for Universal Healthcare in Devolved System Programme. These amounts were directly disbursed to the County Revenue Fund Accounts.
The COB authorised withdrawals of Sh249.75 billion from the County Revenue Funds to the County Operational Accounts in the reporting period.
The transfers comprised of Sh190.61 billion (76.3 percent) for recurrent expenditure and Sh59.14 billion (23.7 percent) for development expenditure.
The authorised withdrawal was an increase by 28.5 percent from Sh194.33 billion released in a similar period of 2017/18 financial year.
Out of Sh190.61 billion authorised for recurrent activities, Sh22.47 billion was for the County Assemblies while Sh168.14 billion was for county executives.
The development budget comprised of Sh1 billion for the County Assemblies and Sh58.13 billion for the county executives.