Counties spent Sh171b on salaries, says report
George [email protected]
Counties spent a whopping Sh171.83 billion on salaries and allowances for the troubled 2019-2020 with most of them failing to meet their revenue targets.
Controller of Budget Margaret Nyakang’o, in her report for the Financial Year 2019/20, said this represented 44.8 per cent of the total expenditure.
She said only 11 counties: Mandera, Kwale, Nakuru, Lamu, Narok, Tana River, Uasin Gishu, Kilifi, Nyandarua, Marsabit and Kericho reported Personnel Emoluments expenditure that was within the maximum allowed limit of 35 per cent of their total revenue in the Financial Year 2019/20. This means 36 counties exceeded the allowed payments.
“On personal emoluments alone, expenditure represented 41.7 per cent of total available revenue of Sh411.96 billion.
However, this is based on specific challenges, which hampered effective budget execution during the reporting period,” she said.
Beside salaries, Nyakang’o said the other challenges included under-performance in own-source revenue collection representing 65.2 per cent of the annual target, where counties were unable to generate their own funds; low expenditure on the development programmes, which represented an absorption rate of 55.6 per cent of the annual development budget, and delays in submission of financial reports to the Office of the Controller of Budget (OCOB) by County Treasuries among others.
Other challenges included huge pending Bills amounting to Sh113.85 billion as of June 30, weak budgetary controls and use of revenue at source.
The report also highlights the slow utilisation of Covid-19 funds by county governments following a release of Sh5 billion by the National Treasury for responses to the various County Revenue Fund Accounts on June 4, through the Ministry of Health.
“An estimated Sh2.36 billion released on July 6, was meant for allowances for frontline health workers dealing with Covid-19 pandemic with about Sh350 million coming in from the Danish government under the Danish International Development Agency (Danida) on June 30 for the interventions,” the report indicates.
Nyakang’o says in the report that counties allocated Sh5.39 billion to mitigate the effects of Covid-19 pandemic from their internal revenue sources, cumulatively, amounting to Sh13.1 billion available for the virus’ interventions.
This was against a reported expenditure of Sh3.43 billion translating to an absorption rate of 26.1 per cent.
“The timing of the funds release, however, was very close to the end of the FY 2019/20 and several devolved units did not, therefore, prepare budgets for the utilisation of the Covid-19 grants,” she said recommending that county governments ensure the Covid-19 grants are factored in the 2020/21 Financial Year budget estimates.
“This will enable all of us to facilitate utilisation of these funds in line with the guidelines by the Ministry of Health and Danida,” she noted in the report.
According to the report, the approved aggregate budget estimates for the 47 county governments in amounted to Sh499.62 billion comprising of Sh187.98 billion, an estimated 37.6 per cent allocated to Development Expenditure, and Sh311.63 billion (62.4 per cent) for Recurrent Expenditure.
The aggregate development expenditure allocation conforms to Section 107 (2(b)) of the PFM Act, 2012, which requires that at least 30 per cent of the budget must be allocated for development programs.
To finance the budgets though, county governments were expected to receive Sh316.5 billion as the equitable share of revenue raised nationally, with Sh22.9 billion as total conditional grants from the national government, Sh39.09 billion as total loans and grants from development partners.
In the report, the counties were also to generate Sh54.9 billion from own revenue sources, and utilise Sh51.23 billion cash balance from FY 2018/19.
“In the Financial Year 2019/20, the total funds available to the county governments amounted to Sh411.96 billion.
This amount consisted of Sh286.78 billion as the equitable share of revenue raised nationally, Sh29.19 billion as conditional grants disbursed by the National Treasury, Sh8.98 billion from the Road Maintenance Fuel Levy Fund; Sh51.23 billion cash balance from Financial Year 2018/19, and Sh35.77 billion raised from own sources.
Disbursements by the National Treasury excluded releases towards Leasing of Medical Equipment, Supplement for Construction of County Headquarters, and Road Maintenance Fuel Levy, which is administered directly by the respective National Government Ministries, Departments and Agencies.