This archive report was first published on 13 July 2019.
Counties Waste Billions on Development Funds ¶
Kenya's counties have been criticized for their poor management of development funds, with some utilizing only 20% of their allocated funds. According to the Office of Controller of Budget, Siaya County spent only 4.8% of its development budget by the end of March 2019.
Siaya County's poor performance is not an isolated case. Other counties, such as Nakuru, also failed to utilize their development funds effectively. Nakuru County's government spent only 9% of its available development cash during the same period.
The County Government Budget Implementation Report for the period between July 2018 and March 2019 shows that counties spent only 24% of their development funds, compared to 65% of their recurrent expenditure. This is despite the fact that the law requires counties to spend at least a third of their expenditure on development.
Only five counties, namely Marsabit, Mandera, Murang'a, Kwale, and Kilifi, met the legal requirement of spending at least a third of their expenditure on development by the end of March 2019.
During this period, county executives and MCAs doubled their spending on travel, with the 47 counties combined using Sh14.88 billion to hobnob from one high-end local hotel to another one overseas. The national government, on the other hand, saw its spending on domestic and foreign travels increase by 38% from Sh8.6 billion to Sh11.9 billion.
Controller of Budget Agnes Odhiambo attributed the poor absorption rate to delays in the disbursement of equitable share by the National Treasury. Council of Governors chairman Wycliffe Oparanya also blamed Treasury for making it hard for counties to spend on development, citing the practice of closing the budget line on development spending in the Integrated Financial Management Information System (Ifmis) in the first months of a financial year.
According to Oparanya, this practice is akin to being 'micro-managed' from Nairobi, as counties can only pay pending bills from previous financial years through 'auto-creation' when development lines are closed.
Of the Sh230 billion that counties spent during this period, Sh120.5 billion was used to pay salaries to county employees, while about a third of the spending went to operations and maintenance. Development activities were left with the remaining 20%.
