Economy

Use development budget to allocate funds, CRA told

mbau

Former Parliamentary Budget Committee and CDF board chairman Elias Mbau. FILE PHOTO | NMG

Counties should be allocated cash based on their fiscal prudence as a way of reducing wastage of public money through salaries and benchmarking trips, the Commission for Revenue Allocation (CRA) heard on Thursday.

Speaking at a public hearing on the proposed formula for revenue allocation, former Parliamentary Budget Committee and CDF board chairman Elias Mbau said the CRA should reward counties that cut salaries and allowances spending to below 35 per cent while raising development budget to at least 30 per cent.

“We should increase allocation on fiscal prudence to five per cent to push counties to spend more on development.

“Most counties have been spending big on salaries and benchmarking trips. The CRA should discourage this,” said Mr Mbau.

The new formula to be used from July will see the delivery of devolved services account for 69 per cent, two per cent will be an incentive for counties to increase revenue collections and a further 26 per cent will be for balanced development.