Showdown looms as counties defy regulations

Nairobi County government’s offices. In the first quarter of 2013/14 financial year, the county spent Sh68.7 million in servicing liabilities inherited from the defunct City Council of Nairobi.

By Macharia Kamau

County governors could be treading on the wrong side of the law, having disregarded the legal framework supposed to guide them in the running of the counties.

During the first quarter of 2013/2014 financial year, all but one counties failed to allocate at least 30 per cent of their budget to development projects. Twenty-seven counties had no development budgets during the quarter to September 2013.

This is in direct contravention of the Public Finance Management Act (PFM) that requires county governments to allocate at least 30 per cent of their budgets to development works.

A report by the Controller of Budget shows counties that had the highest ratio of development expenditure to total expenditure were Nyeri (30.3 per cent), Tana River (26 per cent) and Tharaka Nithi (25.5 per cent).

“The PFM Act requires counties to allocate at least 30 per cent of their budgets for development activities over the medium term,” said the report.

“Although all Counties met this threshold in their budgetary allocations, actual expenditure on development activities remains a major challenge given that on average only 7 per cent of total expenditure went to development programmes during the first quarter of 2013/2014 financial year.”

Another offence that the county governments may have committed under the PFM Act is failure to appoint accounting officers.  According to the law, there should be accounting officers that look after every spending unit or department. But this has not been the case in many counties, which have relied on the County Executive and the County Assembly as the only accounting units.

 “The PFM Act, requires the executive committee member in charge of finance to appoint accounting officers for all the spending units,” said the Controller of Budget report.

“In most Counties, the executive committee members in charge of Finance had not appointed accounting officers for the various departments in the executive and all financial transactions were undertaken by the finance and planning department during the period under review. The various county Public Service Boards were in the process of recruiting chief officers for the departments who are expected to be the accounting officers.”

The county governments also went against guidelines issued by the Transition Authority (TA) on servicing debts that had accrued to former local councils.

“Counties inherited assets and liabilities from the former local councils. Although guidelines were issued by TA for the counties to wait for the conclusion of the audit of their assets and liabilities, some counties continued to service these liabilities,” said the Controller of Budget.

During the first quarter, the counties spent a total of Sh91.4 million in repaying old debts and bills due to the former councils. Nairobi spent the highest amount of Sh68.7 million in servicing these liabilities. Other high spenders Mombasa (Sh20.3 million) and Tharaka Nithi spent (Sh2.4 million).