County Government can’t manage big money, report says

30 May 2015 | by
County Government can’t manage big money, report says

A report by the Africa Centre for Open Governance (AfriCOG) shows that many county governments do not have capacity to capacity to handle the budgets they are requesting for.

The report, titled “Delivering on Devolution? Evaluation County Budgets 2014” evaluates in detail the extent of adherence of county governments to the legal and institutional framework of public financial management and includes an audit of county governments spending during the financial year 2013/2014. 

This is with reference to county budgets on development, capital and recurrent expenditure allocations. The Report also identifies shortcomings as well as best practices in the 2013/2014 county budgeting process and puts forth an analysis of the same specifically in regards to principles of transparency, accountability, openness and public participation.

According to Ms Gladwell Otieno, Executive Director, AfriCOG, the report seeks to evaluate the extent of adherence of county governments to the legal and institutional framework and public financial management.  

“The evaluation focuses specifically on the audit of the county budgets in the financial year 2013/2014. It also extends to the identification and analysis of both the shortcomings and best practices in the county budgeting process vis a vis principles of transparency, accountability, openness and public participation,” said Ms Otieno. 

Further, she says, the report summarizes the various legislative and institutional frameworks for managing county level public finances which she explains, includes assessment of county planning and budget frameworks. 

The Constitution mandates the Office of the Controller of Budget to monitor county budget management and make quarterly reports on performance explains Wycliff Adongo, AfriCOG’s Deputy Director, while frameworks to implement devolution have been put in place, there have been impediments at various stages, not the least supremacy battles between the senate and the national assembly. 

“However, this is not to say that there are positives in Kenya’s devolution journey,” says Mr Adongo, giving an example of the Ministry of Local Government that did well in establishing a competent task force that reviewed international devolution experiences and came up with a good framework for Kenya, which, critically provided that “money follows functions”. Feasible recommendations are provided to improve county budgeting in Kenya based on the challenges identified in the evaluation of the County Budgets in the 2013/14 financial year, he said.

During a panel discussion, Mr Othieno Nyanjom, AfriCOG’s Consultant said that based on the findings and recommendations of the Report, it was clear that most county governments did not have enough capacity to handle the budgets that they were requesting for. “For example, the Office of the Controller of the Budget’s (OCOB) data for 2013/14 showed that the county governments (CG) did not have the capacity to legally and legitimately absorb funds, partly because of the delay in establishing the Transition Authority (TA),” said Mr Nyanjom, adding that this meant that the TA was not able to prepare the CGs well, including building their budgeting capacities. 

He cited an example where TA and the Commission on Revenue Allocation began a procurement process for a consultancy to determine the cost of delivering CG services in March 2014, a year after CGs came into office.

 On capacity, he said, the information collected fron the OCOB and Auditor General indicated extensive, but easily resolved irregularities in CG public financial management (PFM). “Until such impediments are addressed - through capacity building and improved PFM oversight, it would be imprudent to give CGs more money,” he noted.The Consultant further emphasized on the need to create public awareness  county budgets urging that simplified versions of some of the ßcounty legislation such as the Public Finance Management Act, 2012 be made available for citizens to familiarize themselves with what is expected so as to be able to take part in public participation. 

A fact AfriCOG’s Executive Director, Gladwell Otieno agrees with by stating that citizens must be empowered with knowledge in order for them to actively participate in public processes in line with the Constitution.

 Mr Nyanjom noted the need to urgently empower CGs to manage the money they genuinely needed. “While the Constitution and the Transfer to Devolved Government Act envisaged an asymmetric transfer of functions based on emerging capacity, an unconstitutional presidential decree dismissed TA’s oversight role in that asymmetric transfer, by directing TA to transfer all functions at once,” noted the Consultant, adding that it was not too late to learn from this mistake and find a lasting solution. 

 The Report strongly recommends that when devolution is fully operational, the bulk of national revenue should go to the counties.

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