CRA issues strict instructions over diversion of county funds
Commission on Revenue Allocation (CRA) chief executive George Ooko during a briefing for county assemblies and county executives in Nairobi on June 24, 2014 FILE PHOTO | DIANA NGILA | NATION MEDIA GROUP
What you need to know:
- The circular follows concern that several county governments have been using funds meant for service delivery to finance what are regarded as non-priority capital projects.
- According to CRA, the challenges being experienced in health sectors of some of the counties is attributable to the growing trend of diverting funds meant for essential services.
- County Governments have further been instructed to seek long-term financing for such projects in consultation with CRA and the National Treasury.
The Commission on Revenue Allocation has issued strict instructions to counties against diverting funds meant for service delivery to construction of offices and residences for governors.
The instructions are contained in a circular to county executives in all 47 county governments and clerks of county assemblies.
The circular follows concern that several county governments have been using funds meant for service delivery to finance what are regarded as non-priority capital projects.
“The commission has noted a trend where huge amounts of funds meant for essential service financing such as health services are diverted to non-core and non-priority projects,” the circular signed by the commission secretary, Mr George Ooko, states.
Counties on the spot are those that have utilised funds from their equitable allocations to finance purchase and construction of residences, county assemblies and executive offices.
CRA has pointed out that such projects should not be given priority in the first five years of devolution.
“Where there is justification, such projects should be funded using long-term finance of between five to ten years,” the commission said in its circular.
CLASH WITH MCAs
The circular was issued just a day after Kakamega Governor Wycliffe Oparanya clashed with Members of the County Assembly (MCAs) over the construction of new country headquarter offices.
The Kakamega governor has been put on the spot by the MCAS who have threatened to force the county executive out of its current offices.
However, Mr Oparanya argued that the Sh150 million which the county assembly approved in the last financial year for the construction of the new offices was never allocated.
The governor argued that there were more essential projects that needed urgent attention, citing the poor state of roads and healthcare.
According to CRA, the challenges being experienced in health sectors of some of the counties is attributable to the growing trend of diverting funds meant for essential services.
“We have noticed a trend where large funds meant for essential service delivery like health services are diverted to non-priority capital projects,” the circular from CRA dated May 19 states.
LONG-TERM FINANCING
The circular was also copied to county governors, Principal Secretary to the National Treasury, Speakers of county assemblies, Clerk of the Senate and the Controller of Budget.
County Governments have further been instructed to seek long-term financing for such projects in consultation with CRA and the National Treasury.
The commission has, however, clarified that essential capital projects can be financed from equitable share.
Such include renovations of county governments’ offices and facilities, renovations and expansion of health facilities, purchase of medical equipment like standby generators and incubators and purchase of road and water works construction equipment.
Such should, however, also be financed through long-term finance where the investment is substantial, according to the commission.
