Huge pending bills slowing budget implementation in Kakamega, says CoB

The Controller of Budget has cited late submission of financial reports and huge pending bills as among issues hampering effective implementation of the budget by the Kakamega government. 

The 2023-24 budget implementation review report cited the use of manual payroll by both county assembly and county executive and the use of commercial bank accounts for operations instead of the Central Bank of Kenya, as well as the under performance of own source revenue collection.

The report said that the county Treasury misappropriates funds to other uses other than the services duly approved by COB.

“Analysis of financial statements submitted by departments on the Emergency Fund and Bursary and Scholarship Fund reveals that lesser amounts were transferred to respective entities compared to the amount approved by COB,” it said.

The county, the report says, raised only Sh874. 42 million from own-source revenue against an annual target of Sh 2.22 billion, representing 39.4 per cent of the annual target.

The report indicates that Facility Improvement Fund and public health as leading in own source revenue generation by the county at 43 per cent followed by agriculture and subsidised products at 17 per cent and single business permits at 14 per cent.

Advertisement, cess and other revenue sources accounted for 26 per cent.

The report said that the county had pending bills amounting to Sh 71 8. 22 million as of March 31, which it did not adhere to the pending bills payment plan by the county treasury.

Regulations 82(1) (b) of the PFM (County Governments) Regulations, 2015 requires that County government bank accounts be opened and maintained at the CBK.

The commercial bank accounts are for conditional grants, health facilities and county funds or corporations and imprests.

It says that personnel emoluments amounting to Sh 359.07 million were processed through the manual payroll, accounting for 6.5 per cent of the total cost.

“The manual payroll is prone to abuse and may lead to the loss of public funds where there is a lack of proper controls,” he says.

The reports for the county assembly car loan and mortgage fund were not submitted to the CoB for review.

The report recommends that the county should address its own-source revenue performance to ensure the approved budget is fully financed and implement appropriate austerity measures to ensure expenditure commitments are aligned with available revenue.

It further recommends that the county processes salaries through Integrated Personnel and Payroll Database system and urged the devolved unit to fast-track acquisition of Unified Personnel Numbers for their staff.

“The County Public Service Board should regulate staff engagement on contract and casual workers as provided under Section 74 of the County Governments Act 2012. Further, strict compliance with the approved staff establishment should be maintained.”

The report recommended that the county Treasury should adhere to the schedules and settlement plan duly submitted to the COB during the exchequer requisition process without diverting funds to other services.

However the county secretary Lawrence Omuhaka said that he had not seen the report even as he dismissed its contents.

He said that findings of misappropriation funds to items that are not approved by office is baffling because no county can spend any money without approval by the COB.

"Like pending bills, the previous regime left bills amounting to Sh1.4 billion but we have paid until we are now at Sh600 million," he said.

The Finance and Economic Planning executive Livingstone Imbayi said he does not agree with the findings in the report.  

"Although I have not seen the report, I can't agree with the findings unless they furnish me with the evidence they have relied on. Have they given you evidence," Imbayi said.