Broke Kenyan counties plead for help as cash crunch bites

Three months before the 2014/15 financial year comes to a close, some county assemblies are facing a cash crunch after bursting ceilings imposed by the Commission on Revenue Allocation (CRA).

CRA, however, maintains that there will be no additional money to the assemblies and the only way out is to negotiate with county executives to re-allocate funds from vote heads which are not critical.

“We gave money to every line as indicated in the budgets. CRA has no money to send to the assemblies,” said commission chairman Micah Cheserem Saturday.

Cheserem said they would, however, be summoning the assemblies in the red to explain how they spent money released to them.

“We need to know how come they do not have money yet they presented a budget which guides the release of money,” he said. “All money should be used as was planned, unless some unforeseen expenditure like increase in insurance cropped up. If it is an unnecessary expenditure like foreign trips eating up the county allocations, it will be unfortunate.”

Excess allowances

The budget ceiling was imposed by the CRA last year after several audit reports revealed that county assemblies were overspending cash through unnecessary foreign trips and excess allowances.

Following the move aimed at curbing wastage, budgets of most county assemblies were slashed by half, forcing them to take drastic measures to cut costs. But the Senate has expressed concern over the effect the ceilings have on the assemblies which are operating on a shoe-string budget.

Among the hardest hit assemblies are Bomet and Nairobi county assemblies.

Last year, Controller of Budget Agnes Odhiambo rejected more than 30 per cent of the county assemblies’ budgets because they diverted money meant for development to meet their allowances and foreign travel.

The counties set aside not less than Sh2.5 billion to pay travel expenses alone for MCAs, out of the Sh16 billion meant to cater for salaries, allowances and staff.

The financial situation in some assemblies like Bomet, Embu and Nairobi is so dire that services are on the verge of being grounded.

Nairobi Speaker Alex Ole Magelo said the county assembly service board held a meeting with the county treasury which agreed to remit Sh169 million to enable the assembly pay salaries (Sh61 million) for its staff and meet its operations costs (Sh108 million), but only Sh70 million was disbursed to the county assembly.

“This state of inadequate financing now threatens to disrupt the conduct of business by the assembly. If not remedied, the assembly may be forced to halt committee work as regards inspection, workshops and benchmarking visits as well as delayed salaries,” said Magelo.

In Bomet, MCAs have gone without sitting allowances for the last two months as its Sh265 million allocation could not sustain the remaining financial term.

The assembly wants its annual allocation raised to Sh336 million to fund its operations. “The salary vote is the only money we have with us though we will not be able to pay the last two months,” said Speaker Geoffrey Kipng’etich.

Due to lack of funds, sectoral committees in some assemblies have been forced to call off sittings and various reports suspended despite the crucial role the committees play in legislation and oversight. In Embu, MCAs are no longer served with tea or mineral water after most suppliers terminated their services because they have not been paid since the beginning of the financial year.

Financial autonomy

The assembly says the budget ceiling of Sh250 million is too little as it means only Sh50 million will be left for operations every year after deducting salaries. It says MCAs are forced to walk out of the chamber in the middle of sessions to buy water and refreshments.

In Nakuru, the chairman of the Finance, Budget and Appropriations Committee, Moses Ndungu, attributed the delay in adopting a crucial supplementary budget to unlock development funds to the ceiling row.

Senator Bonny Khalwale, who is also the chairman of the Senate Public Accounts Committee, says the ceilings could ultimatetely jeopardise the work of the assemblies by leaving them at the mercy of governors whose work they are supposed to provide oversight.

“The issue of ceilings should not mean that you get less than what you need to execute your duties,” he said after visiting the Taita Taveta Assembly last week. The only hope for the county assemblies now lies in a Bill by Kitui County Senator David Musila who wants county assemblies made financially autonomous by being funded directly by the National Treasury. The Bill has already gone through its first reading in the Senate after stakeholders provided their views.