«MANDERA COUNTY BUDGET IMPLEMENTATION REVIEW REPORT FIRST QUARTER FY 2013 /2014 OCTOBER 2013 Office of the Controller of Budget Forward Mandera County ...»
OFFICE OF THE CONTROLLER OF BUDGET
FY 2013 /2014
Office of the Controller of Budget
Mandera County being one of the worst in terms of insecurity and marginalization is still in the
process creating its structures to discharge its mandates and operationalize all the dysfunctional departments.
This report covers a period of 3 months; July to September, 2013. Even though the Office of the Controller of Budget did not receive the monthly returns as required by the Constitution, the office managed to prepare this report from the returns it received during the requisition which were not complete. I ask that the County Treasury and the whole of county finance team to prepare and submit the monthly revenue and, expenditure returns as well as monthly account reconciliation to the Office of the Controller of Budget for as to comply with the statutory requirements. It is of imperative importance to shift from the norms that the county adapted in giving the retunes only during the requisition of the exchequer which hampered the very informative and standardized report the office would wish to publicize.
The report depicts the performance of various county departmental revenue and budget implementation and compares with last quarter performance. It highlights the performance of local revenue collection, exchequer releases and the county expenditures over last three months as compared to the last quarter March to June, 2013.
Mrs. Agnes N. Odhiambo Controller of Budget Mandera county budget implementation review report July-September 2013 2 Office of the Controller of Budget
TABLE OF CONTENTS1 INTRODUCTION
2 COUNTY BUDGET IMPLEMENTATION
2.0 County Revenue
2.0.1 Locally collected Revenues
2.0.2 Exchequer release to the county
2.1 County Budget Expenditure
2.2 Total County Expenditure
2.3 Economic classification of the county Expenditure.
2.3.1 Personnel Emoluments
2.3.2 Operations and maintenance
2.3.3 Development Expenditures
3 DEPATMENTAL REPORTS-RECURRENT AND DEVELOPMENTS22
3.0 Mandera County Assembly
3.0.1 Key priorities for the departments
3.1 County executive service headquarters
3.1.1 Key priorities for the departments
3.2 Finance Management services
3.2.1 Key Priorities for the Department
3.2.2 Other departments
4 CONCLUSION AND RECOMMENDATIONS
4.0 Challenges affecting implementation of budget
4.0.2 Lack of Human capacity
4.0.3 Delayed submission of financial reports and requirements
4.0.4 Manual financial transactions
4.0.5 Declining locally collected revenue
4.0.6 Lack of Awareness on the budget
4.0.7 Procurement Procedures
4.0.8 Inadequate physical infrastructure
LIST OF TABLES AND FIGURES
TABLE 1: COUNTY BUDGETING PROCESS AT A GLANCE:
TABLE 2 REVENUE ANALYSIS BY SUB-COUNTY
TABLE 3: COMPARISON OF SECTORAL EXCHEQUER ALLOCATION AND ACTUAL EXPENDITURE
TABLE 4 COUNTY ASSEMBLY BUDGET PERFORMANCE
TABLE 5 COUNTY EXECUTIVE BUDGET PERFORMANCE
FIGURE 1: SUMMARY OF MANDERA COUNTY ALLOCATION
FIGURE 2: SUMMARY OF MONTHLY REVENUE COLLECTION
FIGURE 3 MONTHLY LOCAL REVENUE COLLECTION IN MANDERA COUNTY
FIGURE 4 SUMMARY OF THE SECTORAL EXCHEQUER REALEASE
FIGURE 5 SUMMARY OF THE EXPENDITURE ON ECONOMIC CLASSIFICATION
Executive Summary The Office of the Controller of Budget (OCOB) is mandated by the Constitution under articles 228(6) to report on the budget implementation of both the county and national governments by overseeing the budgetary allocation to the two levels of governments.
During the period under review, Mandera county government was allocated an exchequer amounting to around Kshs. 407 million representing 6.2 per cent of the 2013/2014 FY budget.
The county collected from the local sources Kshs 11 million that was channeled to the CRF held at CBK.
The major spending unit in the county is the county executives service HQs, the county assembly and the Finance team as the county is still struggling to put in place the county structures required to operationalize most of the county departments. The county public service board is expected very soon to recruit major position for those departments, hence the county was run by three transitional sectors and major expenditures were categorized under them.
The County spent around Kshs. 40 million on personnel emoluments representing 45 per cent of the whole expenditure; Kshs 49 million was spent on operation and maintenances, this represent 55 percent of the entire expenditure. There were no developmental/capital expenditures as the county did not put developmental requisitions.
The major challenge in the county that led to poor performance of the county budget is the issue of insecurity, inadequate of human capacity and lack of appropriate financial management system needed to strongly control the expenditures of the county.
The OCOB at the county did not receive the monthly sectorial expenditure plan despite its regular follow ups, this could lead to underreporting.
This report recommends the county government to adapt the usage of G-Pay and IFMIS in all financial transaction so that the expenditures and the projects/programs can be match and to reduce the manual processing of financial transactions which is prone to abuse.
The need for the proper improvement on the management of the public fund and strong expenditure control necessitated for the creation of oversight institutions to oversee the management of public fund. Such oversight institution was the split of the office of former controller and auditor general into two distinct office performing totally different functions in overseeing the public fund: the office of the controller of Budget and the Auditor General. The constitution of Kenya 2010 under article 228 established the Office of the Controller of Budge, and the Auditors general under article 229, the split further widened for the two offices to be easily manipulated by other institutions in mismanaging the public resources.
The OCOB is an independent office under Article 248(3) (b) of the Kenya Constitution. Unlike the 1963 colonially crafted constitution that limited the functions and powers of the controller to approving withdrawals from the consolidated fund, the duties and mandates of the office was stretched to ;
To oversee both national and county governments budget by authorizing withdrawals from the Consolidated funs and county revenue funds as clearly stipulated by article 228(4).
Report quarterly to legislatures (both National Parliaments and the senates) on the implementation of the budgets of the two levels of governments Article 228(6).
Report after the end of every year (annual report) to the president and parliaments.
Article 254(1); As soon as practicable after the end of each financial year, each commission, and
each holder of an independent office, shall submit a report to the president and to parliaments:
Conduct investigations based on own initiative or on a complaint made by a member of the public and conduct alternatives dispute resolution mechanisms to resolve disputes.
Article 252(1)(a) states that’ Each commission, and each holder of an independent office
a) May conduct investigation on its own initiative or on a complaint made by a member of the public;
b) Has the power necessary for conciliation, mediation and negotiation.
Being an independent office the article vests the powers of conducting investigations, negotiation conciliation and mediations.
Produce ad-hoc reports as may be required by the president, parliaments or even public;
article 254(2) Publishing and publicizing all the reports (article 254 (2)); so that the public get to understand how their funds are being managed by the concerned parties.
Advice the parliaments where it may not approve or renew the decision to stop further transfer of funds to a state organ or any other public entity.
Article 225(7) stipulates,” Parliaments may not approve or renew a decision to stop the transfer
of funds unless-:
a) The controller of budget has presented a report on the matter to parliament.
Authorize withdrawals from the public funds: Articles 204(9), 206(4) and 207(3) if satisfied by the law as well stipulated in Article 228(5) that states; the controller shall not approve any withdrawals from public fund unless satisfied that the approval is authorized by law”.
Article 204(9),”Money shall not be withdrawn from the Equalization fund unless the controller of budget has approved the withdrawals”.
Article 206(4); Money shall not be withdrawn from the consolidated fund unless the controller of budget has approved the withdrawals”.
Article 207(3); Money shall not be withdrawn from a revenue fund unless the controller of budget has approved the withdrawals.
The budget and the budget making process can be summarized in the following table.
The county financial year starts every 1st July and ends at the 30th June, the whole budget process can be summarized in the table below.
In common with the rest of the Horn of Africa, drought is an inherent part of life in the whole mandera county with the residents’ majorly practicing agro-pastoralism as an economic activity.
The county has 48 MCAs, 30 being elected and 18 nominated. The county has recently announced the position of the chief officers, sub-county administrators and ward administrators to fully set the county structures
2 COUNTY BUDGET IMPLEMENTATIONThe analysis of this quarter budget implementation focuses on the total county allocations, the revenue generated from within the county and the entire sectoral/departmental expenditures.
During the period July to September 2013/2014, the main spending units of the County Government were the County Assembly, County Executive and Financial Management Services.
The main sources of revenue during the period under review were national government allocation (exchequer issues), and Local Revenue.
2.0 County Revenue This section critically examines the overall revenue of the county. Article 203(2) of the constitution of Kenya articulates the minimum amount of the sharable amount of revenue to be assigned to county governments,’ For every financial year, the equitable share of the revenue raised nationally that is allocated to the county governments shall be not less than fifteen per cent of the all the revenues collected by the national government. The fifteen per cent indicated shall be calculated on the basis of the most recently audited accounts of the revenue received as approved by the national assembly as stipulated in Article 203(3). Further, the examination of this overall revenues looked at the main sources of the revenues to the county governments as stipulated in article 203(i)(d)(j),. The sources of such revenues and allocations include equitable shared national revenue, own revenue raised by the county, conditional and unconditional grant from the national government, loans and grants. Out of all these sources, Mandera County relies mainly on; Fiscal transfers from the national government and revenues generated locally.
The constitution of Kenya 2010 under articles 125 states that a county should have reliable, stable and predictable sources of revenue to perform its mandates.
The total revenue that the County received from the national shareable revenue as per the formula adapted by CRA is Kshs 6,780,749,697 of which the equitable share is Kshs 6,550,439,289 and the conditional allocations/ donor projects accounts for Kshs 230,310,408.
Commission on Revenue Allocation identified 14 counties as the most marginalised. Mandera county is one of the worst marginalised county after Turkana, widespread of poverty, illiteracy, food security, water scarcity makeshift medical facilities, impassable road infrastructure among
others are the evidences that was put across by the commission to identify marginalise counties,all of which are widely eminent in the county. For these counties to develop and reach the level where the other counties are in development, the national govt through the CRA have developed equalisation fund. Which is 0.5 % of the last audited of the national Revenue which will be shared in the following manner as adapted the commission.
50% is shared equally among the 14 marginalised counties and 50% is ahred based on the County development index(CDI) Mandera scored 9.25% and 7.14 % for CDI and equal share respectively; hence the combined total fomula the county scored is 8.20% representing Kshs 279 million just less than 1 % after the worst marginalised county; Turkana, which received the highest amount of Kshs 302 million.
The total allocations from the various sources as expounded above for the financial year 2013/2014 is Kshs. 7,059,549,697.00. Figure 1 shows that the highest amount comes from the national equitable share representing a high percentage of 93% followed by the equalisation fund representing 4 per cent and lastly the donor projects or the conditional grant account for the remaining 3 per cent of the total revenues allocated for the county as clearly depicted in the figure below.