We need clarity on development expenditure

The office of Controller of Budget does an important job of overseeing the implementation of budgets for national and county governments. It authorises counties and national government withdrawals from public funds.

To better perform that function and probably to incentivise "good fiscal" behaviour without necessarily blocking expenditure, the Controller of Budget has developed the practice of publicly reporting county expenditure. It's more of a “name and shame” campaign geared to influence county expenditure choices.

And thus last week her report on county expenditure for the first quarter of this financial year (July, August and September 2023) was released and received tonnes of media coverage.

It was reported that nine or so counties spent zero on development.

But this report masks some glaring (mis)classification which ought to be highlighted here. Incidentally, the Council of Governors’ rejoinder ought to have highlighted this misnomer.

And the issue is, what qualifies as development as per Controller of Budget’s point of view?

Counties use billions to buy hospital medicines and non-pharmaceuticals like gloves, hospital supplies and linen.

Those medicines and items improve healthcare for Kenyan people. But according to the Controller of Budget, that is not development but a recurrent expenditure.

Some counties have established universal health insurance covers for poor and vulnerable persons. Kajiado County has hundreds of thousands of persons benefiting from its scheme where poor families get free NHIF cards. Lamu County has practically insured every household against medical calamities.

The Murang’a County government established an association with NHIF and a special medical insurance cover was established for poor and vulnerable families. The beneficiaries get free medical services across the country in NHIF affiliated hospitals. Services are unique and not available to the common NHIF cover.

They include free inpatient and outpatient services, dental and optical services, free emergency evacuation and last expense cover where families get Sh100,000 after the loss of a loved one. In 2023, at least 20,000 families were covered. In 2024, about 40,000 families will be covered, translating into about 160,000 individuals.

But all this is a recurrent expenditure and not development as per controller of Budget guidelines. Murang’a attempted to domicile this scheme under the development part of the budget only for this to be vetoed by Controller of Budget. It had to do a supplementary budget to adhere to Controller of Budget guidelines.

Some counties have established bursary schemes for the poor and vulnerable. Taking into account bursaries go to secondary and university education, the Controller of Budget rightly advised these counties to enact laws in their respective assemblies to create a legal framework that would allow such expenditure.

A county like Kwale has done a fantastic job of supporting children from poor families to go to high-school. Prior to devolution, primary to secondary school transition rate in Kwale was amongst the poorest in the country.

With devolution, the trend was reversed after a very good bursaries scheme was established and probably this made the then Governor Salim Mvurya to be re-elected on a Jubilee ticket against an ODM wave overwhelmingly.

The governor was so popular that he successfully campaigned for his deputy, Fatuma Achani, to succeed him — a woman in a largely rural and conservative county. Mandera County is currently executing a very well thought out bursary scheme.

Secondary school education in the county is now free for all children whether in boarding or day schools — a new innovation by the new Governor Muhammed Adan Khalif.

A friend from the county who stays in Nairobi recently told Yours Truly the people are so happy that if you dare criticise the governor, elders will call and warn you of their intention to curse you.

Some counties have established school feeding programmes for learners. Nairobi is currently executing the idea. Muranga County government established free porridge programme for its 42,000 Early Childhood Development Education learners. That programme ensures the small children attend and concentrate in classes.

But according to Controller of Budget, this is not development. And many other examples.

Incidentally, payment of pending bills (under development vote) is development even if public good was not realised that year.

The Controller of Budget has been arguing it is adhering to accounting standards for public sector which are set in consultation with National Treasury and they mirror international standards. If indeed this is the case, whoever set those standards did not mirror Kenyan reality.

Counties will receive tonnes of bad publicity for doing the right thing — supporting ECDE pupils school feeding programme, bursaries for the poor and vulnerable and medical insurance covers for the indigents.

Whereas indeed counties should be called out when they devote their budgets disproportionately to recurrent expenditure like payment of salaries and travels, surely they need to be congratulated when they provide free secondary school education like Mandera is doing.

And bad publicity is usually very hard to undo.

When bad publicity is gone, It’s gone. One cannot practically undo that bad press because assume John and James heard bad news about county X . After clarification, there is no assurance James and John will hear that clarification. Maybe the clarification will be heard by Jane and Mary, who will not necessarily tell James and John.

Probably the controller of Budget, when issuing the report, should have done full disclosures as explained above. Probably the reporters should have dug deeper before publishing the story.

But the truth is, the report masks some good work being done by various counties .

- Dr Kangata is the Governor of Murang’a County. Email [email protected].