For Online E-newspaper
Daily Nation : February 2nd 2014
SUNDAY NATION February 2, 2014 DEVOLVED FUNDS |Senators want monies tied to needs of counties Justify budget, Senate tells county heads Treasury asked not to disburse more funds without reason BY JOHN NGIRACHU @JohnNgirachu firstname.lastname@example.org with the Commission on Revenue Allocation and agree on counties’ allocation in the next financial year which starts in July. The Finance, Commerce A and Economics Committee made the decision after the Treasury Principal Secretary Kamau Thugge stated the counties would receive Sh217 billion in the year 2014/2015. Although this is Sh7 billion more than the devolved units got in 2013/2014, the senators were dissatisfied and felt that the Treasury ought to come up with “a rational figure.” This amount, said the team headed by Mr Billow Kerrow (Mandera, URP), should be based on a proper analysis on what the counties ought to spend on the functions that have been devolved. It should also include, they added, a reasonable amount for development because the Public Finance Management Act states that at least 30 per cent of devolved funds should be spent on development. With barely two months to March 30 — when the Division of Revenue Bill is due before Parliament — the Senate is keen to avoid the tussles between the two Houses that marked the 2013/2014 budget presentation. Broker deal Deputy President William Ruto had to broker a deal between the two Houses last year after they presented varying proposals of the money to be given to counties. The Senate wanted Sh248bn allocated, while the National Assembly stuck with the Sh210bn figure. CRA has already set out how Senate committee has asked the National Treasury to consult the Bill will be handled in the two Houses; it will be taken to the National Assembly for debate and approval and then forwarded to the Senate for a similar process. If the two Houses fail to agree on amendments to the Bill, the proposed law will be forwarded to a mediation committee. The committee will draft its version, which if agreed on, will be debated and either approved or rejected by both Houses. In its projections, CRA says the counties ought to get Sh279 billion for their second year. CRA’s figures were based on the costing of devolved functions but the Treasury appeared to have marked up based on the Sh210 billion the counties got this year. “The only way to convince us is through costing,” said Mr Kerrow. “It would be more neat if the Treasury could cost the Sh217 billion. Any other basis would be a challenge.” He said the committee would like to see “a more harmonised position” before the Division of Revenue Bill is published. “Costing should be verifi- able. For us, the issue is to ensure devolved functions get adequate money,” he added. Nominated Senator Beatrice Elachi and Kisumu Senator Anyang’ Nyong’o said without the Treasury and CRA having an agreement, the senators would be in a bind. Prof Nyong’o said that when it is established how much each function should cost at both the national and county level, the true cost of public services would be established and wastage avoided. “Don’t get too worried that this money is not being spent. It can give us a clue as to where money was being wasted before,” said the senator. According to Ms Elachi, the main problem with the first year of devolution is that political considerations were put before practical ones when it was announced that functions had been devolved to counties regardless of their capacity to accommodate them. When governors realised they couldn’t handle payrolls, for example, they asked the national government to pay civil servants who used to work for ministries before for six months. But the monthly transfers of funds continued, meaning the county governments were getting money meant to pay nurses and doctors, for example, yet the national government was taking care of that expense. Refund the government The counties were supposed to refund the national government, said Dr Thugge, but that has not been happening as fast as it should. By the end of December, said the PS, the national government had paid out about Sh18 billion, and the county governments had only paid back about Sh2 billion. Because of this shortfall, the Ministry of Health has exhausted its recurrent budget, he said, and the Treasury has had to authorise them to dip into the development budget for recurrent expenses. “This is not re-allocation; it’s just borrowing and they will take it back when they are paid,” said Dr Thugge. Dr Thugge said supplementary budget to be brought when the National Assembly resumes sittings on Tuesday next week would be about austerity measures. This will involve cutting back on unnecessary expenses such as travel. Ms Elachi proposed the crea- tion of a mechanism that would allow the Treasury to penalise counties that do not pay back to the government on time, but the PS said they would prefer consultation rather than an adversarial approach. Sunday Review 23 BILLY MUTAI | NATION Senate Finance Committee Chairman Billow Kerrow gestures during the meeting with Treasury Principal Secretary Kamau Thugge at Kenyatta International Conference Centre, last week.
February 1st 2014
February 3rd 2014