Counties’ expenditure on development dropped between July 2017 and March this year, data from the Controller of Budget (CoB) shows.
In total, the counties spent Sh25.98 billion — which represents a 17 per cent absorption rate of the annual development budget — in the first nine months of the 2017/18 financial year (FY).
This is a drop of 20 per cent from the 37.9 per cent recorded in the same period of FY 2016/17, when development expenditure was Sh62.74 billion.
In the latest report, the Controller of Budget, Ms Agnes Odhiambo, blames the decline on high expenditure on personnel emoluments and delays in disbursement of the equitable share of revenue by the National Treasury.
RECURRENT
The document singles out Garissa, Kirinyaga and Kisumu as counties which did not report any expenditure on development.
A total of Sh3.73 billion was spent on recurrent activities in Garissa.
But the county’s expenditure on domestic travel amounted to Sh67.32 million, with Sh24.9 million being spent by the county assembly while Sh42.4 million went to the county executive.
“The recurrent expenditure was 100 per cent of the funds released for recurrent activities and excluded outstanding commitments which amounted to Sh10 million for recurrent expenditure as at March 31, 2018,” Ms Odhiambo said.
STAFFING
Kisumu’s high wage bill increased by 16.1 per cent from Sh2.42 billion in the first nine months of FY2016/17 to Sh2.81 billion.
There was also increased expenditure on travel costs by 20.1 per cent from Sh140 million in the first nine months of FY 2016/17 to Sh168.14 million in the reporting period.
“The County Public Service Board should establish an optimal staffing structure in order to ensure a sustainable wage bill.
“The County should reduce expenditure on non-essential items in order to fund development projects,” Ms Odhiambo recommended
REVENUE
Similarly, there was high wage bill in Kirinyaga that increased by 68.9 per cent; from Sh1.15 billion in the first nine months of the previous financial year to Sh1.94 billion during the period under review, representing 78.9 per cent of total expenditure.
The CoB lamented that counties wage bill is still high at the expense of development.
Regulation 25 (1) (b) of the Public Finance Management (County Governments) Regulations, 2015, sets a limit of the county government’s expenditure on wages and benefits at 35 per cent of the total revenue.
CONTAINED
County governments spent Sh108.04 billion on personnel emoluments, which accounted for 58.8 per cent of the total expenditure for the period, an increase of 18.2 per cent from Sh91.39 billion in a similar period of FY 2016/17, where personnel expenditure translated to 44 per cent of the total expenditure.
“The office notes that continued increase in wage bill is unsustainable and will reduce spending on development activities. County governments should therefore ensure that expenditure on personnel emoluments is contained at sustainable levels in compliance with regulations,” the CoB said.