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Citizen Weekly

Sunday 14 December 2014


The Constitution of of Kenya 2010 Article 196 (1) (b) demands public participation and involvement in the legislative and other business of the national assembly and its committees. The Public Finance Management Act Sec 125 (2) demands that the County Executive Committee must ensure that there is public participation in the entire budget process. Furthermore, the Public Finance Management Act Sec 137 demands formation of the County Budget and Economic Forum consisting of the governor, the County Executive Committee and members of the civil society.
In exercising this right as enshrined in the constitution, Wajir Anti-Corruption and Justice Forum sought to actively engage in the planning and management of the Wajir county public resources and service delivery by the Wajir county.
In its efforts to ensure efficacy in the budgeting and budgeting  processes, the forum resolved to engage the  services of a professional in budgeting and finance to assist them in analysing understand and critically evaluating the 2014/15 Wajir County Budget as presented to the county assembly and senate. It is widely alleged the last budget was literally looted.
In conducting the analysis, the consultant had a free hand to assess various relevant aspects of the budget but inter alia: Establish if the budget is in line with the Wajir County Fiscal Strategy Paper -if there is one in place, establish if the Wajir County Budget is in line and compliance with the Public Finance Management Act (2012)estimate the viability or otherwise of Wajir county 2014/15 budget as currently constituted and presented and approved by the country assembly and make recommendations to address issues (if any) identified to align the budget to the expectations and benefit of the people of Wajir county.
In doing the review, the main document was the Wajir County 2014/15 Budget as presented by the Wajir Anti-Corruption and Justice Forum. Two versions of the budget were availed two weeks apart– an initial budget and a revised version which Wajuf confirmed had been passed by the county assembly and presented to the senate.
Their scope of work was limited by lack of access to or non-existence of the following critical documents: Wajir county 2013/14 budget – this critical document is not available to the public either at the Wajir county official website or county offices as confirmed by Wajuf. Wajir County Fiscal Strategy Paper for the two years 2013/14 and 2014/15: to the best of information obtained this critical and legally required document is not in existence – it is not clear to us how was the budget developed without the CFSP. Budget narratives:  “Budgets are about making the best choices in allocating the scarce resources available to the county to meet the multitude of competing priorities. A good budget therefore must contain budget narratives that explain the choices that the county has made. Without this, we have made our assessment based on good practice and general information on budgeting and public information on Wajir county status needs and priorities as well as comparatives with other counties and national government,” says the report.
In making the assessment the consultant addressed the structuring of the analysis to critically address, rationale for the budget, alignment of the budget to the county priorities, alignment to the CRSP, compliance with the law – budget financing – deficit and incorporation of county revenues into the budget, maintaining/improving level essential services–equity in distribution of resources among the wards–disclosure and amounts versus need/priority and development/sustainability potential of each ward and separation of county responsibilities from national responsibilities –disclosure and in of expected revenues and allocation from national government, devolution etc.
In making their assessment, besides the professional, technical and general research and review, the consultant also made extensive reference to: -constitution of Kenya (2010) relevant chapters and acts, public finance management Act  (2012), report of the controller of budget for Wajir county  (and review of other counties for balance) and report of the Wajir Anti-Corruption and Justice Forum to the EACC.
The consultant observed glaring loopholes on the Wajir county budget for the year 2014-2015. It observed that the Wajir county budget does not have a narrative to explain the choices made in the budget in all the budget lines.
The roads and public works department, trade, industrialisation, co-operative department, public health department and others. It is necessary to have a narrative in the budget that explains the choices made in coming up with the budget lines. It is not possible to know what activities and expenses are envisioned in the budget lines which makes impossible to check whether the activities included are valid for this budget, check whether the amounts indicated are reasonable, check whether the activities represented present a fair distribution of resources within the county and check whether the totals of the budget line were correctly calculated.
The budget must have a detailed narrative indicating the activities and expenses envisioned for each budget line. This will encourage public participation and honour the accountability and transparency requirements of this budget. It is necessary to have a plan for the county from which the budget is produced. Adequate narration is necessary in the budget to show how the budget correlates with the plan. In the present scenario we are not sure if such a plan exists. According to the lobby, the budget must be produced with reference to the county plan. If no plan exists then one should first be produced and used as a source of guidance for the budget.
The budget does not have a clear priority target for in the budget. It was observed that the areas of high expenditure include roads and public works (1,565m or 22pc), public health (1,514M or 21pc) and water resources at (802m or 12pc). As mentioned in the general information above the current rain conditions do not favour farming. Self sustenance in farming is a major goal for the country and the same should feature prominently in the county plan and in this budget. The budget for agriculture (Sh568m) nearly equals the same for executive (Sh539). In our view the agricultural sector has not been given adequate priority. It is worth mentioning here that the agriculture and water departments are capital intensive and adequate funds would be necessary to make a difference.
The consultant wants adequate research done with the incorporation of public participation to ensure that areas of highest priority receive adequate funds. The budget shows various capital expenditures but does not mention where these expenditures will be. These include construction of ABT centres in the lands department and production of physical plans for three sub counties in the same department. The consultant wants that all plans for the county be done with fair distribution of the resources to the various districts in mind. The same should be documented in the budget.
The budget does not show comparison figures from the previous year. It was observed that various expenses and capital purchases were effected in the previous year, but none of these have been referenced in the current budget. That all budgets should have comparative figures which give a guideline on the expected expenditures for the current budget. This will also link the capital expenditures from the previous year which may not have been completed.
The budget does not show the amounts which may be collected by the county in form of local taxes and fees. It was observed that the budget does not mention any amounts that will be collected in this current year in form of taxes and fees. No mention is made on how much was collected in the previous year. This is contrary to the public finance management Act 130(1)(b)(iv). It is also worth noting that the Wajir county budget implementation report for January to March 2013 does show Sh9.3m as revenue for the four months in question which shows that it is a significant budget item. (WCBIR Mar – June 2.3). Budgets should have an indication of the amounts the county government expects to raise as their contribution to the budget.
The budget does not show how the county government expects to fund the resultant deficit. The budget shows an expected appropriation from the government of Sh6,278,070,000. The total budget is Sh7,100,794,284. There is a resultant deficit of about Sh823m. There is no information in the budget to show how this deficit will be funded. In the budget for the previous period, Wajir county did not show the amounts it intended to get from the national government and its local sources in the budget. (Kenya Budget Analysis: Wajir county No 6). This is a critical requirement that has been neglected in the current budget as well. Wajir residents want a proper balancing of the budget be done showing how all the expenditures will be funded.
The budget does not consistently have unit costs. It was observed that some of the departmental budgets have unit costs included (town administration offices) while no other department had this. Information on the unit costs in important as it confirms the prudence in the figures as to market values and overstatements are concerned. The consultant group wants all the departmental budgets to have a unit costs section filled out to show the units purchased.
The budget does not consistently have estimates for the next three years as is required. It was observed that most of the departmental budgets do not have Estimates for the next three years (town administration offices, ministry of agriculture, roads and public works and others). Information on the next three years budget estimates helps in ensuring the budget is rational and helps in preparing the next years budgets. Departmental budgets should have three-year estimates.
The budget shows a duplication of expenditure estimates in the financial management department and the county executive department.
The duplication shown above lacks explanation. The items in question are service centres that should be housed in one department. It beats logic to have multiple source centres for these expenditures. The combined total estimates for these items, looks excessive. It is important to have narrations especially when such anomalies appear in the budget. Such lack of narration provides room for corruption.
A clear explanation needs to be given for this anomaly and a rethink on the amounts budgeted so as to show a more realistic budget. These amounts and other activities which are of this nature should be budgeted under one department. The budget does not give a clear distinction between the roles of the government and those of the county. It was observed that Wajir town activities should be central government functions, that a clear distinction be made between county functions and government functions and enough narration be included where there is overlap of functions.
The budget does not give a clear distinction between the roles of the government and those of the county. It was observed that Wajir town activities should be central government functions. The consultant wants a clear distinction be made between county functions and government functions and enough narration be included where there is overlap of functions.
The departmental budget for the county finance and planning does include three years estimates. These estimates however show a 10pc increment in the budget for all the recurrent items. It is totally unrealistic to assume a 10pc increase in the very varied expenses in the budget. The items include purchases of workshop tools, furniture and equipment. These items are one off expenses where we do not expect recurrent purchases at a uniform 10pc increment.
The consultant wants care taken to include in the budget accurate figures with assumptions that are well thought out and researched.  Again an inclusion of narratives would have helped to show whether the assumptions implied are valid. Also the budget does not have a budget policy statement. The PFMA 2012 requires the county budget to include a summary that contains the budget summary. This is an important statement as it gives the budget an anchor for the choices made in the budget. The consultant wants the budget to include a summary with the required details to justify the choices made in the planning process.
The lack of comparatives from previous period and information on the steps taken to improve the current year budget are critical. Items like the tarmacking of Wajir town appear on both budgets with no update on implementation. The issues raised in the previous budget and on its implementation, there is no clear change in the process of budget making.
In its current state this budget can be a vehicle for misappropriations. Without the narratives that guide expenditure many expenses can be included in implementation that were not envisaged during the planning of the budget.Wajir country has not addressed the identified lack of capacity to prepare a coherent comprehensive budget (Controller of Budget Wajir County Budget Implementation Report March – June 2013). This lack of capacity still exists and is demonstrated by the fact that there was a recommendation that there needs to be professionalism in the budgeting process with concerted public participation and accuracy, consistency and compliancy by the setting up of an internal efficiency monitoring framework and evaluation. (WCBIR March – June 3.6 (3)). Lack of consistency in the current budget with different formats for the various departments which do not meet the requirements of this budget. Agriculture, public works and water resource are all different from each other. 
“We cannot tell if the designated information system is in place as no evidence of its output is evident. Again the report (WCBIR March – June 3.6 (2) did recommend making the IFMIS operational. The county budget is a key tool for the distribution of funds to the Wajir residents in an equitable, transparent and accountable manner. This needs to be evident in its production, implementation and reporting functions. At the moment this is not evident,” says the report.
Based on the above observations and facts, the Wajir county budget as currently constituted is not and cannot be recommended for implementation. The lobby wants the budget recalled and a competent expert engaged to support the country in reviewing and revising the budget to address the identified gaps and the public to be involved in the process in line with the constitution and public finance management Act (2012). There is no public participation in Wajir county affairs. The budget and tenders are all fixed in Nairobi hotels. Wajir residents are shocked as to how the government can allow these kind of fraudulent budget to find its way and passed without scrutiny.
Wajir resident are querring how the controller of budget and the senate passed such kind of a budget with glaring fraudulent discrepancies that cannot be implemented. This is part of the evidence we are going to present to the senate in support of the petition currently before the senate,” said  Abikar who is the chair of Wajuf.
The lobby has been fighting corruption in the county by presenting the grievances of the residents to the Ethics and Anti-Corruption Commission and other oversight government agencies. A petition to the president has been filed with the senate. EACC investigation into the affairs of Wajir county is in top gear. The lobby group is working on the 2013/14 budget analysis and already theft through budget lines close to Sh500m has been discovered. Over Sh1b is separately believed to have been looted through single sourcing, price inflation, dubious allowances and general malpractices. A further Sh500m is also believed to have been lost through short changing of specification after the award of tenders to companies associated to the governor campaign financiers. Wajir residents are concerned that the county is not functioning. Out of the 700 days since the inception of county government, Wajir governor is said to have in the county less than 98 days, He is said to be busy either in Nairobi making deals, fixing tender awards, to allegedly conceal corruption cases or busy buying properties.

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