County governments continue to be slow in releasing reports on spending to the Controller of Budget, indicating that transparency in the devolved entities is a key casualty.
Devolution in Kenya has been beset with many challenges and experts now say that the first step in dealing with them is having greater transparency in reporting, including submission of the budget implementation documents that are then reviewed by the Controller and the public.
Delays in making reports available could increase the risk of misuse or theft of public resources, which has been one of the accusations frequently levelled against some of the governors.
According to a new survey by the International Budget Partnership (IBP) Kenya, only four counties had published 10 key documents relating to the 2021/2022 fiscal year. The four were Kitui, Makueni, Nyeri and West Pokot.
Data produced by IBP-Kenya shows that while transparency has improved in recent years following a growing demand by the citizenry for more information on the budgets of their counties, most of the county governments are falling behind in publishing the documents for reviews.
While the Public Finance Management Act of 2012 specifies that counties must submit their budget implementation reports within 15 days after the end of a quarter of a financial year, most counties had not handed them in by the deadline, notes County Government Implementation Review Half Year 2022/23.
For the 2021/22 fiscal year, the Controller’s report indicates that no county met the deadline, then set at one month after the end of the period.
The county Finance Act and quarterly budget implementation reports were the least published documents with about half of the counties having not produced them in the past three years.
IBP Kenya conducts the County Budget Transparency Survey (CBTS) every year by evaluating the availability and comprehensiveness of 10 key budget documents across the 47 sub-national units.
In the most recent survey, it noted that there were some four counties, including Isiolo, Migori, Wajir and Kajiado that had not produced any of the 10 documents.
‘’There is a growing awareness among citizens of their roles and responsibilities in the budget-making process. They are better versed in how governments raise, allocate, and spend public resources, and there is more demand for transparent, equitable, and accountable budgeting systems,’’ says the IBP-Kenya report.
On the other hand, the Controller of Budget says that county governments are required to prepare and submit financial and non-financial reports in line with the PFM Act, 2012, not later than 15 days after the end of each quarter.
The deadline for submission had been legally set at one month for the fiscal year that ended in June 2022.
The treasuries – led by fund administrators — are supposed to submit the report to the Office of the Controller of Budget regularly.
“The quarterly financial statements should be submitted to the County Treasury with a copy to the Controller of Budget 15 days after the end of each quarter. During the reporting period, it was observed that several fund administrators did not submit the quarterly financial statements to the Controller of Budget within the legal timeline,’’ says the Controller in the most recently published county government report on budget implementation.
“In most counties, fund administrators failed to furnish the OCoB with quarterly reports on financial and non-financial information contrary to the requirement of Section 168 of the PFM Act, 2012.”
For the quarter to June 2022, some counties even submitted their reports as late as after August 11, 2022, the Controller said, adding that this led to a delay in finalising the budget implementation review report.
“Despite the above legal provisions, county governments did not submit the financial and financial reports within the recommended timeline, which led to a delay in finalising this County Budget Implementation Review Report. Nine county governments submitted their reports after 11th August 2022, namely Elgeyo Marakwet, Embu, Isiolo, Kajiado, Kilifi, Narok, Tana River, Turkana, and Wajir.”
Unlike in previous reports where the Controller had not made a specific recommendation on who is to act to ensure the law on submission of reports is followed, this time round the Controller advised the finance county executives to ensure the quarterly reports are prepared and submitted.
“The Controller of Budget advises the County Executive Committee Members responsible for Finance to follow up and ensure Fund Administrators prepare and submit quarterly reports in line with the PFM Act, 2012.”
Transparency requires that the public is updated on how the counties are being run and, therefore, contributes towards surmounting the challenges that the devolved units face.
IBP Kenya says some of the obstacles to devolution noted over the years are cash flow and unmet revenue targets.
Strong oversight
“Since devolution, profound challenges have affected the delivery of services at the county level and adversely towards the poor and most vulnerable in the communities. The challenges cut across prioritisation of the resources, budget implementation, that is, cash flow challenges, unmet revenue targets and common supplementary budgets.
“Additionally, challenges on stalled and abandoned of capital projects that already consumed public funds but remained incomplete or unequipped. The first step of unclogging some of these challenges is through open budgets which will provide opportunities for the public to participate in decision-making and legislatures to strengthen their roles in approval and oversight.”
