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Daily Nation : February 4th 2014
DAILY NATION Tuesday February 4, 2014 diedus iy Budget boss says it is against the law to use the money without following due process BY CAROLINE WAFULA email@example.com nvolutron DIRECTIVE» ALL REVENUE COLLECTED MUST BE DEPOSITED IN THE APPROPRIATE ACCOUNT BEFORE USE Counties warned on funds raised locally C FILE | NATION ounty governments have been warned against spending revenue collected locally without following due process. The Controller of Budget, Ms Agnes Odhiambo, said it is against the law to use the money before channelling it through the County Revenue Fund. She directed all county governments to comply with the law. Some counties have been spending funds collected at source without having it go through the county accounts. The practice has been blamed for the decline in revenue collection among the counties. Article 207 of the Constitution provides for the establishment of a County Revenue Fund to handle all the money raised by the county government, except that which is “reasonably excluded by an Act of Parliament”. In a presentation to governors attending the second Inter-Governmental Budget and Economic Council meeting on Friday, the Controller of Budget directed all county treasurers to follow the law. County treasurers are required to obtain the written approval of the Controller of Budget before withdrawing money from the revenue fund. The Controller of Budget, who presented an overview of the first quarter county budget implementation review report at the meeting chaired by Deputy President William Ruto, said use of multiple bank accounts should stop immediately. The meeting attended by several Cabi- net secretaries and their principal secretaries, the Commission on Revenue Allocation, the Transition Authority, the Auditor General’s office, and the Commission on the Implementation of the Constitution, heard that use of multiple bank accounts makes the tracking of expenditure and the reconciliation of accounts difficult. The office of the Controller of Budget has also discouraged the use of manual systems to manage resources. Local revenue leakages have been blamed on the use of the system to collect revenue. It is feared that the system is prone to abuse and could be an avenue for embezzlement of funds. Counties have, therefore, been asked to operationalise the e-revenue module within the integrated financial management information system (IFMIS) and discontinue the manual systems of rev- Controller of Budget Agnes Odhiambo. She has directed county governments to follow the law when spending revenue generated locally. smart company 5 enue collection. During the first quarter of the current financial year, county governments collected revenue amounting to Sh4.4 billion, representing 6.5 per cent of their annual local revenue estimates of Sh67 billion. This is seen as under-performance in revenue collection. Figures from the office of the Control- ler of Budget showed that monthly local revenue collection among the counties had been on the decline from a high of Sh1.60 billion in July to Sh1.36 billion in September. The decline in revenue is attributed to manual financial systems and money being spent at source without being channelled through the County Revenue Fund, encouraging under-reporting. Other reasons include lapses in revenue control and general apathy of county staff associated with the uncertainties of the transition. Statistics indicate that personnel emoluments account for the highest expenditure at 54 per cent of the total expenditure for the first quarter. The meeting at the Kenya School of Government also heard that domestic and foreign travel are the highest single expenditure followed by purchase of motor vehicles. The latter is, however, a one-off expenditure. Committees established under the In- ter-Governmental Budget and Economic Council proposed that county governments be allowed to develop their own revenue collection information technology systems based on standards set up by the National Treasury.
February 3rd 2014
February 5th 2014