MCAs oppose ceiling on county budgets

Devolved functions in counties could come to a halt as county assemblies, the Office of the Controller of Budget and the Commission on Revenue Allocation (CRA) wrangle over budget-making.

MCAs are contesting the budget caps imposed by the Controller of Budget and CRA on salaries, allowances, gratuity and mileage.

The two public finance watchdog bodies also set the maximum on funds allowed for foreign travel this financial year after the Controller of Budget in the third quarter County Budget Implementation report revealed that MCAs had spent Sh2 billion, some of which added little value to their core mandate.

The impasse has seen the Office of the Controller of Budget reject budgets from a number of counties until they conform to the ceilings set by the CRA.

ADVISED TO COMPLY

Controller of Budget Agnes Odhiambo had on May 20 advised the county assemblies to comply with the conditions before they can access their allocations from the national government.

“All county governments should strictly follow these requirements to avoid inconveniences in budget execution,” she said in the now contentious circular.

In a stormy meeting in Nairobi July 11, the Office of the Controller of Budget and the CRA maintained that given the funds available for devolved units and the requirement that at least 30 per cent of the money be set aside for development projects, the ceilings are in order.

Deputy Controller of Budget Stephen Masha reiterated Ms Odhiambo’s letter to the MCAs that his office will not approve withdrawal of public funds for budgets that are against the law.

EMPOWERED BY LAW

The Controller of Budget is empowered by law to authorise government departments and agencies to access public funds.

She is required to scrutinise each county and national budget before permitting the withdrawal of funds.  

But the defiant MCAs said they were not ready to rewrite the budgets to comply with the circulars, which they said lacked legal basis, adding they will apply their own formula for sharing Sh30.2 billion between the assemblies and county executives.

Instead, the counties said they will stick to the fiscal strategy papers that the respective assemblies approved on March 14 outlining broad strategic priorities and policy goals.

The fiscal strategy papers also provide a financial outlook with respect to county government revenues and expenditures and guide the counties in budget preparation.  

“We’ll stick with the budgets we have made, and we are going to the Supreme Court to ask for an advisory opinion for the first time,” Dr Abdi Nuh, the Speaker of the Tana River County Assembly who also chairs the County Assemblies Forum (CAF) said July 11.

On June 20, Dr Nuh wrote to Ms Odhiambo stating that the advice on caps came too late to be considered.

In any case, the CAF chairman had said in the letter, the advice was ill-informed and not based on facts.

“Unfortunately though, your letter emphasising county government entities to adhere to the advisory is a veiled directive and no longer passes for an advice.

The county assemblies’ mandate to approve the budgets of county governments as stipulated in the Public Finance Management (PFM) Act 2012 is clear of ambiguities and your attempt to direct county assemblies on the quantum of expenditures is unwarranted,” Dr Nuh’s letter to Ms Odhiambo added.

The CAF chairman had argued in the letter that Article 201(d) of the Constitution on prudent management of public resources Ms Odhiambo had relied upon in setting the ceilings neither bestows on her nor on CRA the powers of setting ceilings.  

NO MANDATE

“The budget-making process is an elaborate framework detailed in the PFM Act 2012, and no section whatsoever gives mandate to CRA or your office to set ceilings for county government entities,” Dr Nuh told Ms Odhiambo in the letter.

In another letter to CRA chairman Micah Cheserem, CAF had argued that setting the budget ceilings was the work of county treasuries which in any case have to justify the same during the preparation of the county fiscal strategy paper.

“I am under no obligation (as are other county assemblies) to justify to your office or that of the Controller of Budget why Tana River County Assembly needs to exceed the ceilings recommended by your office.

That justification has already been done when it was sought, by the county treasury,” the June 25 letter reads in part.

He was also defiant on the thorny issue of foreign trips by MCAs, which he said were necessary avenues for benchmarking.

“We must learn to be smart and we’ll have to go out of the country. If someone tells us to go and learn from other counties, what are we going to learn from other counties yet we are all starting from zero? What will Machakos, for instance learn from Tana River? Was it established before the other? It’s nonsense,” said Dr Nuh.

HYPOCRITICAL

He argued that it was also hypocritical of the Senate, to deny the MCAs the chance to travel out of the country when senators are doing the same thing.

“We’ll tell the senators that if you are curtailing us from learning outside the country then let us all learn from the National Assembly because they were here before us,” said Dr Nuh.

During the Friday meeting CAF said the Controller of Budget Ms Odhiambo’s advisory which was anchored on the CRA letter of April 22 was illegal and will restrict their work.

The MCAs accused the Controller of Budget and CRA of being used to fight devolution by purporting to take the country back to the era of centralised planning by the national government. 

Mandera County Assembly Speaker Abdikadir Sheikh alleged that whether CRA and were probably being used by other people who are against devolution.

He added; “We will not comply with it because it is unconstitutional and we will not go to court over it, because it is you to go to court to challenge if you have a problem.”

Some of the county assemblies that will be most affected by the circular are Trans Nzoia and Turkana.

The expenditure of Trans Nzoia MCAs was capped at Sh295 million down from Sh638 million in the first year.

Out of the proposed Sh295 million, the circular provides that Sh286 million will go to paying salaries, leaving just Sh9 million for other expenses.

In Turkana, the circular advised that the money available to the county assembly is Sh356 million which according to the speaker Geoffrey Kaituko is far less than what they spent in the first nine months of the financial year that has just ended.

CRIPPLE OPERATIONS

“I think CRA wants to cripple our operations because if we go by their recommendations we will close shop before December,” said Mr Kaituko.

Busia County Assembly Speaker Bernard Wamalwa and Kiambu County Budget and Appropriations Committee Chairman Fred Mwangi said they had resolved to defy ‘the unconstitutional circular’ and accused the public finance watchdog bodies of overstepping their mandates.

Nyeri senator Mutahi Kagwe who is a member of the Senate Committee on Finance recommended that the Controller of Budget, CRA and CAF should appear before the senate committee to unlock the impasse.

But Mr Kagwe at the same time was categorical that MCAs need to reduce expenditure on foreign trips.

According to the senator, at least 15 countries among them Switzerland, Rwanda, Singapore and Brazil have said they are not willing to host Kenyan delegations.

Apart from the foreign trips, MCAs have been accused of arm-twisting governors to allocate more resources to them.

Some county assemblies have also been accused of supporting development projects where they have interests.