A report released yesterday by the office of the Controller of Budget (CoB) showed that counties accumulated KES 165 billion pending bills in the last financial year ending June 30, 2023.
According to CoB, Nairobi County had the highest pending bill in FY 2022/23 at KES 107.3 billion while Elgeyo Marakwet County had the least with KES 18.6 million.
In the report, the Annual County Budget Implementation Review Report, the CoB, Margaret Nyakang’o attributed the increase in pending bills to reluctance by some of the county administrators to pay them and delays in cash transfers.
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“The high level of pending bills may be attributed to delays in disbursing the equitable share by the National Treasury and political interference and refusal by successive county governments to honor obligation,” she said in the report.
She also advised the county government bosses to settle the bills as a first charge on the budget in line with Kenyan law.
“Further county government should prepare credible budgets with realistic revenue targets. Counties should also arrange to have the ineligible pending bills examined and disposed off legally in reference to the Public Finance Management (County Governments) Regulations, 2015,” Nyakang’o said.
The CoB also raised concerns over the used of manual payrolls by majority of the counties. She said this may lead to high levels of corruption and loss of public funds due to lack of proper controls.The report also showed that own source revenue collection by County governments amounted to KES 37.8 billion and translated to 65.9% of the annual target of KES 57.4 billion. This was improved performance compared to KES 35.9 billion generated in the previous financial year. “While the progress is noted, it remains below the expected target for the reporting period'” the report said.
The equitable share of revenue raised nationally and transferred to the County Governments was KES 370.0 billion, representing 100% of the approved equitable share in the County Allocation of Revenue Act of 2022. The National Government transferred KES 16.2 billion as additional allocations to County governments, while the cash balance available from FY 2022/23 was KES 42.0 billion. Overall, the County governments had a total of KES 466.1 billion available for spending in FY 2022/23.
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The combined County government expenditure amounted to KES 428.9 billion, representing an absorption rate of 83.3% of the aggregated annual budgets of KES 515.2 billion. Recurrent expenditure was Kshs.330.9 billion, representing 93.3% of the annual recurrent budget of KES 354.6 billion. Development expenditure amounted to KES 97.9 billion, representing an absorption rate of 61% of the annual development budget of KES 160.54 billion.
The report also highlighted key challenges that adversely affected budget implementation in FY 2022/23 including underperformance of own source revenue collection, low expenditure on development programmes, high level of pending bills, high expenditure on personnel emoluments, and delay in submission of financial and non-financial reports to the CoB.
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