New offices not priority, CRA tells governors

NAIROBI: Money spent on capital-intensive projects like building a governor's official residence or new county headquarters is hurting service delivery in the devolved units, the Commission for Revenue Allocation (CRA) has said.

CRA said the construction of new county assemblies is also not essential.

CRA has warned governors against unnecessary spending on such projects, in a new directive aimed at utilising funds for essential services like healthcare.

"Major capital projects are not a priority in the first five years of devolution. Where there is justification, such projects should be funded using long-term finance of between five to 10 years," reads a circular by CRA.

Huge amounts of cash meant for health services have been diverted, the agency that develops the formula of sharing resources between the national and the devolved governments, has found. CRA said that there was public outcry in some counties over falling standards of medical services, and this was attributed to imprudent resource allocation by the counties.

Governors have been asked to instead renovate the existing offices and facilities for the county administration, and equip hospitals. Acquisition of road and water works construction equipment, though essential expenditure, should be funded through long-term financing if the investment is substantial, CRA said.

Commission Secretary George Ooko, who signed off the circular, said governors need to consult with CRA and Treasury before committing to long-term debt. CRA's warning comes amid major stand-offs in several counties over governors' budgets.

In Kiambu for instance, Governor William Kabogo has been criticised by some MCAs who are opposed to a plan to purchase 72 cars for the executive team at a cost of over Sh350 million.

The MCAs claimed Kabogo had pushed for adoption of the Supplementary Appropriation Bill that allows re-allocation of development funds to be spent on the vehicles.