Governors have cited bottlenecks in the electronic procurement payment system, a high wage bill and low revenue collection among challenges undermining county operations and development.
They also demanded an expanded role in overseeing security in their respective regions by reviving the push to chair a key security organ, a move the national government has resisted.
Faced with pending bills estimated at Sh100 billion, the county chiefs blamed red tape in the Integrated Financial Management Information System (Ifmis) and E-procurement systems for inefficiencies in the management of county billions.
Answering questions on behalf of the county bosses, Kakamega Governor Wycliff Oparanya said Ifmis had contributed to pending bills and that some counties struggled with accessing E-procurement due to poor internet connectivity.
“This is a system we found… has continued to have problems, especially when we are processing our payments, and when doing procurement. Furthermore, E-procurement requires as many as 25 steps to succeed,” Mr Oparanya said.
However, he said under-performance in local revenue collection – official Government reports reflect a three-year low – and a high wage bill posed a challenge to public finance and development projects.
The latest report from Controller of Budget Agnes Odhiambo shows that in the first half of the 2017-2018 financial year, county governments’ own-source revenue (OSR) dropped by 28.9 per cent to Sh9.95 billion.
In a similar period in the 2016-2017 financial year, counties had collected Sh14 billion.
Highlighting the wage bill crisis is the fact that of the Sh399 billion aggregate budget estimates for 47 counties for 2017-2018, some Sh258 billion or 65 per cent of the allocation is earmarked for recurrent expenditure, with only Sh141 billion meant for development.
“As county governments, we must therefore continue instituting measures to cut on recurrent expenditure and adopt innovative strategies for increasing own-source revenue in order to increase budget allocation for development programmes,” said Nanok in the fifth such address since devolution launched in 2013.
However, he defended counties in budget prioritisation, saying the devolved units were working to cut on recurrent expenditure, and adding that allocations towards development were also rising.
“We emphasise that by the time we reach 2022, our aggregate budgetary allocation towards development will be about 40 per cent across all county governments,” he said.
As part of austerity measures, Nanok said MCAs’ sitting allowances had reduced to Sh422 million in the Controller of Budget’s half-year report for 2017-2018, from Sh1.29 billion in a similar period in the 2016-2017 financial year.
There was also reduction in travel expenditure by 28.4 per cent - from Sh5.28 billion in a similar period in 2016-2017 to Sh3.77 billion in the reporting period, he noted.
Nanok said counties had been able to improve local revenue despite lacking ‘parent legislation’ on revenue collection.
“Some of the counties have no Wi-Fi and internet is not working. Our staff were not well trained and there was no proper capacity building. However, over the past one year, there have been improvements,” he said.
Nyandarua Governor Francis Kimemia said governors should chair security forums at county level that are attended by county security experts in order to familiarise themselves with security issues on the ground. He said the law also provided for county policing authorities.
“We have now come of age. Some of us are experts and can chair those security forums.”
Outlining achievements, Nanok said there was improved public expenditure in agriculture, standing at Sh23.8 billion in 2015-2016 including creation of markets and value addition centres.
“In the year 2016-2017, for example, county governments constructed 10 new markets and established 32 market linkages, which have greatly enhanced market-driven agriculture production.”
Nanok said there were also significant developments in the health sector, adding that immunisation had improved by 70 per cent in 2016-2017.
Governors said Early Childhood Development and Education (ECDE) was one of the most successful sectors in terms of growth. Combined budgets for ECDE and technical and vocational training had risen from Sh24.6 billion in 2016-2017 to Sh31.4 billion in 2017-2018
Highlighting other teething problems, Nanok said counties owed debts to medical suppliers. He noted that the bills should be ‘offset immediately’ to avert a crisis.