Controller of Budget Margaret Nyakango during the Senate Liaison Committee retreat at EKA Hotel in Eldoret town on June 4, 2024.
Counties spent Sh15.8 billion paying non-existent workers in the 2023/2024 financial year, Controller of Budget Margaret Nyakang'o has revealed.
Speaking in Naivasha at the ongoing mid-term retreat for senators, Dr Nyakang'o said the money was not processed through the Integrated Financial Management Information System (Ifmis) as required by law.
This means the payments were processed manually to avoid scrutiny by auditors.
Dr Nyakang'o said the money was used to pay ghost workers, raising questions about the level of corruption and waste in the devolved units.
“The Sh15.8 billion was processed manually and I can tell you the bulk of it went to payment ghost workers,” Dr Nyakang’o said.
Dr Nyakang'o said the waste of public funds in the counties was alarming and called for close collaboration between her office and the Senate to curb the vice in the devolved units.
The Budget Controller said non-compliance with budget ceilings in the counties was the order of the day, with counties spending more than what was recommended by the Salaries and Remuneration Commission (SRC).
She cited the construction of residences for governors, deputy governors and the speaker of the county assembly, where despite the SRC providing a clear ceiling on what should be spent on the buildings, counties ignore the ceilings and spend three times more.
According to the SRC, the governor's residence should not cost more than Sh45 million, the deputy governor's Sh40 million, while the county speaker's residence should not cost more than Sh30 million.
"If you go to the counties, you will find that what is being spent on these mammoth buildings is three times what is being provided, which makes you wonder what purpose they serve," said Nyakang'o.
She expressed concern that despite the wastage in the devolved units, a total of 38 counties failed to meet the minimum threshold of spending 30 per cent on development.
She named Nairobi (10.03 percent), Kisii (13.7 percent), Mombasa (16.2 percent), Kisumu (17.5 percent), Taita Taveta (18.6 percent) and Kiambu (19.4 percent) as some of the counties that had the lowest percentage of their budgets spent on development in the 2023/2024 financial year.
"It is illegal not to meet the 30 per cent threshold, the court had even ruled on this. Because if you are not spending on development, you are killing devolution," Dr Nyakang'o said.
Last year, Dr Nyakang'o said counties only managed to collect Sh58.9 billion as own source revenue, or 73 per cent.
Nyamira Senator Okong'o Omogeni said it was shocking the amount of money being lost in the country.
"Listening to the Controller of Budget and the Auditor General, it's as if Kenya has been turned into a criminal enterprise. Where is the problem, is it that you don't back up your reports with facts, is it that the EACC is not acting on the report? Is it that the DPP doesn't want to prosecute these people? Where exactly does the buck stop? He asked.
Dr Nyakang'o lamented to the senators that her office has suffered massive budget cuts that have prevented her from even travelling, a factor she said has hampered her work.
"Every year my budget is cut, right now I have a small budget that I cannot even travel on, let alone my staff," Dr Nyakang'o said.
She said in the current financial year, she requested for Sh1.6 billion but was only given Sh702 million, an amount she said could not help her carry out all her activities.
"I have a staff of 158 so the budget cannot do much as far as her functions are concerned," Dr Nyakang'o said.
She urged the Senate to support her office in amending the Controller of Budget Act and regulations to give it more powers in tracking financial expenditure by counties.
Homa Bay Senator Moses Kajwang said they would take the fight to the National Assembly on budget matters, especially those that affect constitutional offices.
"If the Controller of Budget asks for Sh1.6 billion and she only gets Sh700 million, how is she supposed to work? We must assert ourselves as the upper house and demand that the Senate must approve the budgets of all constitutional offices. Otherwise, people will just say we are all bark and can't bite," said Mr Kajwang'.
The position was backed by Kitui Senator Enock Wambua, who said the Senate must be involved in the budget making and approval of the Controller of Budget, the Commission of Revenue Allocation and the auditor-general.
Dr Nyakang'o says she currently does not have the right to access county bank accounts to track county spending.
"I have tried to access the county bank accounts. I asked for it but was denied. At the moment, I have to beg the counties to let me see their accounts. I can only do that after the Auditor General has audited them, but that may not help much," said Dr Nyakang'o.
Auditor-General Nancy Gathungu said a total of 2,035 reports from county governments had already been submitted to the Senate, exposing the financial mess in the devolved units.
"You have a lot of work to do when you resume, all the reports are with you," Ms Gathungu said.
The senators said they would engage the governors more on the recommendations of the Auditor General and the Controller of Budget.
