Why counties' spending on Covid-19 remains murky

kagwe council of governors

Health Cabinet Secretary Mutahi Kagwe (right) briefs the media on the rollout of the Covid-19 vaccine to counties outside the offices of the Council of Governors (CoG) on March 10, 2021.

Photo credit: File | Francis Nderitu | Nation Media Group

Kenyans are still struggling to access information about how counties spent Covid-19 funds and are demanding that the details be made public.

Lobby groups under the Follow the Money Initiative, including the Slums Information Development and Resource Centres, Transparency International and the Covid-19 Transparency Accountability Project, are demanding that the details be published.

But access to data, especially financial and procurement information, remains difficult, not only for members of the public but also government departments, including the Office of the Controller of Budget (OCB).

A special report published in May 2021 by the OCB boss Margaret Nyakang’o on the expenditure of county governments in the first nine months of the 2020/2021 financial year listed 26 devolved units that had delayed in submitting their financial and non-financial reports.

Ms Nyakang’o cautioned that failure by county treasuries to submit the reports in a timely manner undermined the effectiveness of her office. She said that the delays were not only hampering its operations but were also illegal.

The counties fingered for late submissions were Bomet, Bungoma, Busia, Homa Bay, Kajiado, Kakamega, Kericho, Kilifi, Kisumu, Kitui, Lamu, Machakos, Marsabit, Meru, Migori, Mombasa, Murang’a, Nairobi City, Nakuru, Nandi, Siaya, Taita Taveta, Tana River, Trans Nzoia, Vihiga and Wajir.

“The delay in submission occurred despite the OCB instructing counties to provide financial reports by 15th April, 2021 in line with Section 16 of the COB Act, 2016. 

The affected county treasuries are reminded to ensure timely preparation and submission of financial and non-financial reports in line with the law,” Ms Nyakang’o noted in her report.

According to Section 166(4) and Section 168 (3) of the PFM Act, 2012, county governments are required to prepare and submit financial and non-financial reports not later than one month after the end of each quarter.

The 2020 audit report from the Office of the Auditor-General (OAG) showed that at least Sh214 billion was mobilised by the government through loans for the period between March and December 2020.

Appearing before the Senate earlier this year, Auditor-General Nancy Gathungu exposed mismanagement of Covid-19 funds by county governments, citing delays in procuring critical supplies that might have exposed the public to infections.

The special audit on the money was used by county governments also raises questions about the legality of items procured to fight the pandemic and recommends that the Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigations look into the issue to establish whether any crimes were committed in the inventory management of Covid-19-related items.

Reports by the OCB for the period ending July 2020 showed that the national government allocated counties Sh5 billion as conditional grants to fight Covid-19. An additional Sh2.3 billion was issued as allowances for frontline health workers. 

Another grant of Sh350 million from the Danish International Development Agency (Danida) was also issued, bringing the kitty to a total of Sh7.7 billion.

The resources were allocated from the National Government Covid-19 grant, which was not part of the 2020 county budget allocation, funds from counties’ own-source revenues or from development partners. Of the available funds, only Sh3.43 billion was used, representing an absorption rate less than 50 percent. 

However, county governments defended the low absorption rates when interviewed by the FTM group, saying the funds were disbursed late towards the end of the 2019/20 financial year and could not have been used fully.

Spending details

By the time OCB authored the special report in December 2020, Mombasa County had not provided an account of how Covid-19 funds were used. 

Nairobi, Bomet, Embu, Kirinyaga, Mandera, Meru and Nakuru did not provide details on expenditure and use of Covid-19 resources as of July, 31, 2020.

However, Nairobi Metropolitan Services (NMS) Director-General, Mohamed Badi elucidated the expenditure later that year in an interview with Nation.Africa, but only after the Nairobi County Assembly had put NMS on the spot over its failure to account for Covid-19 funds.

Mr Badi said his administration received Sh294 million from the government’s Covid-19 mitigation kitty and gave details on a few expenditures, including: Sh114.3 million to establish a treatment centre at Mbagathi Hospital and Sh70 million to procure equipment for the hospital. 

Some Sh80 million was allocated for building a 160-bed isolation facility at Mbagathi Hospital and Sh45.4 million to recruit 254 healthcare workers to support isolation and treatment centres beginning in November 2020. 

The NMS boss also said Sh78.3 million was spent on public health interventions, establishing a 90-bed isolation facility at Pumwani School, PPEs and building a 190-bed isolation centre at Lady Griffiths Hostel at the Kenya Medical Training Centre. 

Consumption by counties

Whereas the other counties mentioned adversely regarding transparency on how Covid-19 funds were used are yet to address the concerns, OCB released a special report detailing the consumption of the funds by all counties.

Among the lowest spenders of the funds were Trans Nzoia, which had at its disposal Sh330 million to fight Covid-19 but used a paltry Sh3 million, an absorption rate of 0.9 percent. 

The money for fighting the pandemic was, however, greatly reduced in the approved supplementary budget for FY 2020/21. The county provided Sh39.82 million for Covid-19-related expenditure. A total of Sh28.34 million was spent during the reporting period on allowances for frontline healthcare workers.

Nyeri also spent Sh1,950,000 though it had Sh223 million, representing a 0.9 per cent absorption rate. But in the 2020/21 financial year, the county provided Sh253.2 million for Covid-19-related expenditure. A total of Sh115.9 million was spent during the reporting period, representing a 45.7 per cent utilisation rate.

Kisii County used only 3.1 per cent of its total allocation of Sh376 million. In the approved budget for FY 2020/21, the county provided Sh156.87 million for Covid-19-related expenditure. A total of Sh114.34 million was spent during the reporting period, representing a 67.8 per cent absorption rate.

Samburu County was not left behind, with a utilisation of Sh124 million, representing 4.5 per cent of the total Sh276 million available funds for Covid-19. 

The county, however, provided Sh25 million in addition to the unspent balance from the FY 2019/20 for Covid-19-related expenditure. In FY 2020/21, the county provided a total of Sh196.53 million spent during the reporting period.

The big spenders

Whereas a majority of the counties hardly used 50 per cent of their total allocated Covid-19 funds, some counties emerged as big spenders of the funds. 

The leading absorption rate, 71.5 per cent, was recorded in Isiolo, which used Sh58.5 million of the available Sh81.7 million. Laikipia spent 58 percent (Sh135.6 million) of the total Sh233.9 million allocated for pandemic mitigation measures.

Homa Bay spent 66 per cent (Sh144.7 million) of the total available Sh219 million. However, the county did not provide for Covid-19-related expenditure in the approved supplementary budget for FY 2020/21, according to the OCB report released last month.  

Whereas documents in government offices, including the Controller of Budget, the Auditor-General and the National Treasury, could be showing the allocations, governors say the money hardly reaches their counties’ coffers, and when they do, they are only partial disbursements.

When governors are asked about the reports by Ms Gathungu regarding the misuse of Covid-19 funds, the Council of Governors (CoG,) now chaired by Embu Governor Martin Wambora, has on several occasions blamed the national government for failing to disburse funds to the counties. 

“Failure by the National Treasury to disburse funds to the counties has paralysed activities … in several ways, including slowed implementation of development programmes, slowed fight against the Covid-19 pandemic, accumulation of pending bills and delayed payment of salaries to all county staff,’ Governor Wambora said on June 9 at the CoG headquarters in Nairobi.

Deputy CoG chairperson and Kisii Governor James Ongwae dismissed claims that money had been misused by county government, saying there are procedures laid down to solve issues pertaining to misuse of funds allocated to the devolved units. 

“Whenever a governor is accused of misusing funds, we follow the procedure and the governor is taken to the Senate to account for the funds. That is what happens. As at now, we have no such cases. We are cash-starved,” he said. 

Details on exactly how coronavirus funds were spent are not listed in the Controller of Budget’s report, which only generalised the spending as 'Covid-19 expenditure'.

Kenyans and lobbies, on the other hand, are demanding that counties make these details open and allow taxpayers to monitor how their hard-earned money is being spent.