Cut recurrent expenditure, counties told

Irene Githinji and Alvin Mwangi @PeopleDailyKe

Counties have been urged to institute measures to reduce recurrent expenditure and adopt innovative strategies to increase revenue for development projects.

The move is aimed at increasing funds for development programmes, even as it emerged there was a 67 per cent drop in expenditure on Members of the County Assembly (MCAs) sitting allowances in the 2016/17 financial year.

Council of Governors (CoG) chairman Josphat Nanok said half year report by the Controller of Budget on counties budget implementation for 2017/18 financial year shows that on aggregate, MCAs sitting allowances reduced from Sh1.29 billion in a similar period of 2016/17 financial year to Sh422.06 million.

He also said travel expenditure dropped by 28.4 per cent from Sh5.28 billion in a similar period of 2016/17 financial year to Sh3.77 billion in the reporting period, which shows counties are trying to cut on their recurrent expenditure to focus on development.

Last year, Controller of Budget said each MCA took home an average Sh84,875 per month in sitting allowances, down from Sh102,045 in a similar period the previous year, translating to a 16.8 per cent drop.

The ward reps earned an average Sh82,712 a month in sitting allowances in their first year in office, with the amount rising steadily in subsequent years to cross the Sh100,000 mark.

On public finance, Nanok said key challenges in Integrated Financial Management Information Systems (IFMIS), e-procurement connectivity challenges, under-performance in local revenue collection, high wage bill may affect implementation  of development projects.

“As counties, we must continue to institute measures to reduce recurrent expenditure and adopt innovative strategies to  increase own-source revenue to increase budget allocation for development programmes,” said Nanok.

He made the remarks yesterday during the fifth State of Devolution Address (Soda). At least 20 governors attended the event.

Up to 2017/18 financial year, Nanok said counties have received Sh1.25 trillion as equitable share with an expected Sh314 billion in the 2018/19 financial year.

Allocations from the National government share of revenue as grants has been pegged at 66.9 billion with an expected addition of Sh17.2 billion in the 2018/19 financial year.

And despite the challenges counties have faced with the high wage bill, Nanok said counties are prioritising on service delivery, with aggregate budget estimates all counties amounting to Sh399.73 billion in 2017/18 financial year.

This comprised Sh258.1 billion allocation for recurrent expenditure and Sh141.63 billion for development expenditure. “The allocations towards development has been on a positive trajectory since the onset of devolution. We emphasise that by the time we reach 2022, our aggregate budgetary allocation towards development will be about 40 per cent across all counties,”  said Nanok.

On local revenue collection, Nanok said counties have improved their revenues to augment the inter-governmental transfers from the national shareable revenues though the challenge has emanated from lack of parent legislations on revenues they intend to collect as well as fully identifying their potential.

“The Council is consulting with Treasury on a newly drafted County Enhancement Revenue policy meant to help counties enhance their own local revenues. We want to support counties to collect adequate revenues,” he said.

By sector, Nanok said counties have allocated an average of 6.6 per cent of their total budget to agriculture, with the current public expenditure standing at Sh23.8 billion for 2015/16.

On health sector, he said counties have sustained annual allocation of over 25 percent despite many competing priorities.

On the health workforce, Nanok said counties have progressively bridged health workforce gaps in the last six years though recruitment, strengthening their management and instigating responsive actions to address emerging challenges such as industrial unrest.

Out of the total number of health workers, there are 5,000 clinical officers, about 26,000 nurses and 4,080 doctors serving county health facilities though Nanok said there is need to examine whether the numbers have remained constant.

On land, planning and urban development, he said 29 counties are at different stages of developing their spatial plans while 18 are yet to embark on them.

“I would like to confirm commitment of all Governors and respective counties towards delivering on the objects of devolution and invite citizens, private sector,development partners and non-state actors to join hands with County and National Government and drive country forward,” Nanok stated.

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