DIVISION OF REVENUE STALEMATE

Governors have no right to demand an extra coin

The National Assembly has stuck with the initial allocation of Sh310 billion even after revision by the Senate to Sh325 billion.

In Summary

• By the third week of the first month of the financial year, Treasury is yet to disburse money top the counties.

• Counties have not been very transparent in declaring the revenue generated from the local and internal sources.

County Governors led by CoG Chairman Wycliffe Oparanya speak outside the Supreme Court after lodging a case seeking the apex court's intervention in unlocking the current impasse on the Division of Revenue Bill 2019 on July 15, 2019.
County Governors led by CoG Chairman Wycliffe Oparanya speak outside the Supreme Court after lodging a case seeking the apex court's intervention in unlocking the current impasse on the Division of Revenue Bill 2019 on July 15, 2019.
Image: JAMES MBAKA

County staff across the country, save for a few, downed their tools on Wednesday to protest their July salaries delay.

This is as the stalemate between the National Assembly and the Senate over the Division of Revenue rages on. By the third week of the first month of the financial year, Treasury is yet to disburse money top the counties.

Matters were made worse by the arrest of the now-former Treasury CS and PS Dr. Henry Rotich and Kamau Thugge respectively on corruption charges. The arrests briefly interrupted the smooth flow of business at the Treasury.

 
 

The Executive weighed in by the President declaring that there was no extra money for the counties and advised the governors to make do with the resources already.

The governors then took the unprecedented move to demonstrate along the city streets and presented a petition to the Supreme Court. On Wednesday President Uhuru Kenyatta retaliated that the counties will have to do with what was allocated.

The National Assembly has stuck with the initial allocation of Sh310 billion even after revision by the Senate to Sh325 billion.

This dispute was a symptom of a simmering supremacy war that has been long drawn. A debate has been raging between MPs and Senators on which of the two houses is higher in the pecking order.

This hostility between the two Houses creating an unfavourable environment in revenue distribution was not anticipated by the drafters of the Constitution. However, opinion was divided on the veracity of the demands made by the counties as supported by the Senate.

The political philosophy in having two chambers of Parliament was grounded in the framework of checks and balances. It was expected that they would act as a counterbalance to each other so that the legislation made is in the best interest of Kenyans.

It was hoped that as Parliament acted to control the excesses of the Executive, the country would not risk sliding into parliamentary dictatorship.

The spirit of the Constitution was that the Houses would exercise caution in their relations and demonstrate decorum and dignity in handling state affairs. That they would be guided by utmost good faith in their dealings.

However, good sense does not seem to have been employed in the deliberations, especially in regard to their relationships. The drafters did not elaborate well on their distinct roles.

It has, therefore, been left to varied individual interpretations on which House is superior. Yet the spirit of the Constitution could not have implied superiority ranking if they were to complement and countercheck each other.

 

 

SUPREMACY BATTLES

The division of revenue has been turned into a battlefield for the supremacy wars to the detriment of the counties and citizens. While the ping pong games continue, the delay in the release of funds has been the excuse rather than the reason for the collapse of service delivery.

The Senate has chosen to blame the National Assembly for this impasse. On the other hand, the National Assembly has regularly and in a condescending manner, reminded their siblings to familiarise themselves better with the Constitution.

The legislative tension has now paralyzed the operations of the county governments. With brinkmanship and grandstanding, it is not known how, if and when the crisis will be resolved.

Meanwhile, the usual County Public Service casualties of healthcare and water and sewerage management have begun to bear the brunt of this intransigence.

The Constitution provides that the national government will allocate and distribute to the counties not less than 15 per cent of the annual government revenue. The debate has thus been around whether the annual government revenue is as per the proposed budget or the last audited financial report.

Supporters of devolution have pushed the proposed budget as the basis for the division, while the opponents have held that the audited accounts are a more accurate and fair presentation of financial status.

The second flank of the dispute is the threshold of 15 per cent. The pushers of devolution aver that the constitutional percentage is far below the needs of the county governments. The national government has conversely and consistently maintained that it has always given far beyond the legal requirement.

The President has gone ahead to challenge the counties to demonstrate what they have done with the funds they have received so far.

WHY COUNTIES DON'T DESERVE AN EXTRA PENNY

The national government’s claim that the counties have not been prudent and people sensitive in their use of public resources is lent credence by three factors.

Counties have not been very transparent in declaring the revenue generated from the local and internal sources. In most cases, they are accused of understating the appropriation in aid to conceal their true worth.

The monies that are then generated from local taxes are then mostly pilfered and not used to finance county activities.

The audit is also manipulated to ensure whatever was not captured in the county proposed budget as internally generated revenue is not reflected in actual collections.

On rare occasions, they have simply failed to collect the levied taxes efficiently. Then there is the ever-ballooning wage bill. 

Governors have whined that they inherited a bloated workforce from the now-defunct local government authorities. But they have failed to explain the spiralling employment craze during their tenures.

Worse, many county governments have been fingered by the Auditor General for having ghost workers in their payrolls. Many of the new recruits have no relevance to the county functions but employed as rewards for their political support. 

The third issue is grand corruption involving the funds transferred from the Treasury. While the high-profile fight against graft has focused more on the national government, the counties have all along been known to be bastions of corruption.

Cartels of tenderpreneurs have invaded the weak procurement structures of as profiteers with reckless abandon. They work in cahoots with corrupt county officials. This happens since the counties are far-flung away from the scrutiny of centralised national functions such as investigative security.

Counties resources have, therefore, lined the pockets of members of the respective executive and legislative organs. It is common knowledge that in the last seven years of devolution, most investments and new business ventures are owned wholly or in partnership by county officials.

When the Samburu and Kiambu governors were arrested and arraigned, they shared one denominator. Their net worth since assumption of office was not comparatively commensurate with the county per capita income during the same period. They acquired mind-boggling wealth during their stay in office, which their incomes from county employment and previous investments could not support.

It was more painful to note that the living conditions of their respective citizens registered no significant improvements. The Samburu and Kiambu cases can be safely attributed to many more counties.

Some governors have had the audacity to appear at the launch of projects funded by the national government with the sole intention of claiming credit for the same.

It is against the backdrop of lack of transparency on local revenue, ineptitude and grand corruption in use of national funds that the counties should be forced to do better at the governance level. They should not demand more funds without a corresponding demonstration of the ability to be prudent.

The Senate and the National Assembly should unite to ensure the counties are transparent and accountable. The impunity currently witnessed must be halted for the benefit of all. The governors deserve no more single cent.