SUPPLEMENTARY BUDGET: Executive fails to propose funds for the dual carriage, Assembly discovers mischief

In Summary

• Budget Highlights
• Extracts from the report
• DOWNLOAD; Report

The County Assembly of Bungoma has passed the 1^st Supplementary Budget report by the Budget and Appropriation Committee Chaired by Kimaeti MCA Hon. Jack Wambulwa. The report that was adopted with zero amendments saw the Budget committee propose decreases and increases on Departmental budget ceilings

In the main budget the County did allocated 350m for the construction of the dual carriageway and Kshs. 96 Million paid on Misikhu-Brigadier road. Kshs. 343 million was then paid to the dual contractor who has since made good progress but it’s surprising that the executive did not bother including a proposal towards the road in the 1^st supplementary budget. The Chinese Contractor had initially submitted his 1st interim cert in Aug 2020 and the 2^nd in Dec 2020, a pending cert of 400 million (pending bill)

Nways, let’s look at the supplementary budget;

COUNTY ASSEMBLY OF BUNGOMA, SECOND ASSEMBLY, FIFTH SESSION

BUDGET AND APPROPRIATIONS COMMITTEE

REPORT ON THE FIRST SUPPLEMENTARY BUDGET, FY 2020/2021

The first supplementary budget was submitted and received in the office of the Clerk on 4^th February, 2021 for onward submission to office of Hon. Speaker Emmanuel Situma for tabling on the floor of the house. It was occasioned by a number of reasons as follows;

1. Re-voting and re-appropriation of balances including conditional grants, from the previous financial year 2019/20
2. Compliance with the approved CARA, 2020
3. Revision of the approved projections in Local Revenue and the Appropriation in Aid.
4. Regularization of the re-allocations done on specific budget lines.
5. Declaration of Pending Bills, and allocation of funds for payment
6. Re-voting balances from FY 2019/20 Kshs. 2,562,534

• Equitable shares 1.320,961,881
• Grants               1,241,572,239
  2. A reduction of Kshs. 100,090,000 million on the equitable share to comply with CARA 2020.

3. A reduction in local revenue (Finance Act) projection by Kshs. 200 million.
4. An increase of Appropriation in Aid in the department of Health Kshs. 78, 107,280
5. Additional personnel requirement of Kshs. 168 million across departments.

Department Amount

6. Total Pending bills of Kshs. 733,484,226 million has been allocated in the first supplementary budget against an actual requirement of Kshs 1,263,717,220 billion. The breakdown of the pending bills per department is as shown below.

7. Ward based projects reductions of approximately. Kshs. 2.1 million per ward in current year allocation.

The total approved allocation was Kshs. 765,000,000. This amount has been proposed for reduction by Kshs. 94,735,058. This translates to Kshs. 14,894,777 down from Kshs. 17,000,000 per ward in the approved budget. The reduction across the department is as shared below.

Sector committees’ proposals;

Highlights

• New Recruitment: The Assembly declined to allocate funds for recruitment of new staff while absorption of Casuals and payment of their dues as demanded by the Courts years ago is yet to be done.
• 168 million requested for the purposes of salaries was DECLINED since the government provided inadequate information despite the fact that they provided a collective payroll in which no separation of staff was done under each of the sub-department yet while budgeting and as per PFM reg. 120(2), each employee should be linked to a program in the budget of a county government entity’s vote.
• Pending bills; The executive failed to fully provide for pending bills in all departments. The assembly recommended that the pending bills worth Kshs. 530million with no appropriation should be captured in the CFSP 2021
• Purchase of furniture and fittings at 45 million (1 million per ward) was meant to equip ECDE classrooms across the county to enable pupils learn in a conducive environment
• Village administrators’ employment put on hold since administrative units are yet to be delineated/demarcated hence the request was declined
• Car Loan and Mortgage; The County Assembly Hon. Members Car Loan and Mortgage fund has an allocation of Kshs 54.3 million. Quarterly reports and financial statements for both the car and mortgage for staff and Honorable members have nevertheless NOT been tabled in the House as required by PFMA law governing fund administration
• Assembly administration block; An allocation of Kshs. 116 million as the balance brought forward towards completion of the administration block
• Officers still on the payroll despite previous recommendation for disciplinary action; Carolyne Buyela; Mr. Martin N. Wafula and Ms. Pamela Serut. Assembly demanded that the implementation committee ensures execution of house resolutions
• Construction of Centers of Excellence with an approved allocation of Kshs. 29,104,858 has seen a reduction of Kshs 16.6 million affecting the allocations on the 3 VTCs as follows:

• World bank grants have balances brought forward in all benefiting departments. Health – Kshs. 95,298,051, Agriculture (NARIGP grant) Kshs.198, 697,581,
• Development projects put on hold due to inadequate funds
• Construction of the blood bank at BCRH at Kshs. 10million, a county project which this Budget committee reinstated after the depart struck it off its proposal
• Bungoma Municipality;

 Download report here; REPORT BY BUDGET AND APPROPRIATIONS COMMITTEE ON THE 1ST SUPPLEMENTARY, BUDGET FY 2020-2021 – Bungoma

The projects status are as highlighted below:

• Kimilili Municipality;

The status of the projects are detailed in the table below:

COMMITTEE OBSERVATIONS, RECOMMENDATIONS AND CONCLUSION:

COMMITTEE’S OBSERVATIONS

The committee made the following observations in respect to the 1^st Supplementary Budget FY 2020/21

1. Looking at the reasons for this supplementary, the supplementary ought to have been done in the 1st quarter of the FY and not in the 3 ^rd quarter in order to ensure prompt service delivery to the Citizens of Bungoma and also to guarantee absorption of development funds. Most on-going projects stalled awaiting supplementary budget. The Supplementary budget was submitted at the time when the County Assembly was expecting the CFSP 2021.
2. The resource envelope is shrinking with all the revenue sources estimates downsized in this supplementary as seen with the loss of Kshs 200million on the local revenue, Kshs.100million on the equitable share and reduction in the grant figures from development partners: EU funding in Tourism and NARIGP in Agriculture.
3. Vote book balances show high absorption of recurrent budgets with very low absorption on development vote.
4. Personnel emoluments are a first charge but this supplementary budget has revealed that most departments are not allocating sufficient funds for compensation of employees. It’s been a challenge determining the actual allocations since the departments do not submit their payroll during budget preparation.
5. Total Pending bills by end FY 2019/20 reported in this supplementary stands at Kshs. 1,263,717,220 with only pending bills worth Kshs 733,484,226 receiving an appropriation leaving pending bills of Kshs.530 million without funding. This supplementary budget is also creating more pending bills with funds deducted from awarded/on-going and committed projects. Most of the funds have since been restored/ reinstated to avoid a case of digging one hole to fill the other.
6. The ward based projects as a strategy to implement the county projects and a means to devolve resources has not been embraced by most departments with low absorption of ward based funds reported showing most 2017/18 projects up-to date not implemented The ward based projects are appearing as pending bills across the departments.
7. Departmental vote-books shows most reallocations were done beyond the 10% rule as outlined in the section 154 (2c) of the PFMA 2012. With some departments reallocating as much over 100% on a vote as seen in Finance and Governor’s office contravening PFMA 149 where resources are supposed to be used in a lawful and authorised manner

COMMITTEE RECOMMENDATIONS:

Upon scrutiny of the First Supplementary budget FY2020/21, the committee recommends as follows:

1. THAT, County Treasury to be timely when submitting fiscal documents to the County Assembly.
2. THAT, Personnel emoluments to be provided for fully in the annual budget and not in a supplementary as per PFM Regulations 119 elaborates on expenditures in relation to Human Resource with 119(2) stating: The budgetary allocation for personnel costs shall be determined on the basis of a detailed costing of a human capital plan of a county government entity as approved by the responsible county department for public service management matters, the County Public Service Board and County Treasury. 119(4) states: The responsible county government department for Public Service Management matters, CPSB, shall only approve establishment of new public service positions after getting confirmation of availability of budgetary provision from the County Treasury. The human capital plan includes the promotions to be done, gratuity and vacant positions to be filled.
3. THAT, on the resource envelope, the County Treasury should enhance local revenue collection by introducing more revenue streams and reducing leakages. Departments should adhere to the conditions set by the development partners since non-compliance can lead to termination of the grant or reduced figures allocated to Bungoma.
4. THAT, all sector committees should further purpose to oversight the FY2020/21 departmental programmes to ensure compliance as per the approved budgets. They should in addition, ensure that budget implementation reports have been interrogated together with the expenditure reports.
5. THAT, pending bills worth Kshs. 530million with no appropriation should be captured in the CFSP 2021 to form part of the ceiling and prioritised in the annual budget of the FY 2021/22. The County Assembly will not approve any new project/programme in the next FY year until the pending bills are cleared and on-going projects properly funded.
6. THAT, the County government should abide by the PFM laws that guide preparation of the supplementary budget. Subsequently, the County Treasury should develop regulations to guide budget reallocations by departments. There should be no further reallocations on departmental approved budgets until such regulations are developed and approved by the County Assembly as required by PFM Act 2012 sect 54 (3).

The Budget and Appropriation Committee as constituted currently has the following members:

2. Jack Wambulwa Chairperson
3. Erick Wapang’ana Vice Chairperson
4. Joseph Juma Member
5. Meshack Simiyu Member
6. Joan Kirong Member
7. Jane Chebet Member
8. Martin Pepela Member
9. Paul Wamalwa Member
10. Grace Sundukwa Member
11. Sospeter Nyongesa Member
12. Violet Makhanu Member

Download report here; REPORT BY BUDGET AND APPROPRIATIONS COMMITTEE ON THE 1ST SUPPLEMENTARY, BUDGET FY 2020-2021 – Bungoma