APRM • SECOND COUNTRY REVIEW REPORT OF THE REPUBLIC OF KENYA 354. The CRM found that the perception of the general public during the consultations that the government procurement system at the county level is not open and transparent. That most government tenders are awarded on the “whom do you know basis”, and bribes. Besides, the tenders are awarded in exaggerated prices. The perception of people is that the huge sums of money which could have been used to execute projects and programmes to productively affect the lives of people are lost. Revenue Collection and Accountability 355. There is adequate evidence of revenue performance and discussion of reforms carried out to boost revenue by the national government. However, there is very little narrative, if any, of how revenue is accounted for. At the county level, budgetary statistics were not discussed. Data on the internally generated revenues of counties were not provided. This made it difficult to assess the fiscal capacity of the county governments. However, it is known that many counties do not have adequate capacity to efficiently administer their own taxes. It follows that there is heavy dependent on the revenue shared by national government. Project Execution 356. Participation in Economic Policy Making. The Constitution of Kenya and the enabling legislations (for example, Public Finance Management (PFM) Act 2012) provide for public participation. By law, every county is expected to set up a County Budget and Economic Forum (CBEF). This idea is good. However, the budgetary process and planning at the county level, it is reported, is generally not open and participatory, and accountability is very limited. The CRM was informed that even when consultations are held, the projects proposed by the communities are hardly considered for execution. Furthermore, the CRM was apprised that those invited to participate in economic policy decisions making are usually selected based on their loyalty to those in the authorities. Special Fund - Equalisation Fund 357. During the consultations, specifically in Isiolo County, where participants were drawn from three counties (Isiolo, Marsabit and Moyale), the CRM was informed that the Constitution of Kenya provides for Equalisation Fund (EF), which the national government can use to provide socio-economic amenities - health facilities, water, roads and electricity - in areas that are marginalised. The CRM was further informed that the constitution specifies that 0.5% of the national budget should be paid into the EF. This provision (see Article 204 and also see Article 216) was confirmed from the Constitution of Kenya by the CRM. The intent of this fiscal instrument is just and good as it will enable the beneficiary counties meet the national minimum standards and further inclusive development. However, the CRM was informed that the EF is yet to be implemented because the authorising law to operationalize it has not been passed by parliament. During the consultative forum with the national government officials, the CRM learnt that the National Treasury had passed regulations in 2015 under the PFM Act, 2012 to administer the EF; and that the EF Board was established thereafter. The CRM further learnt that there is a court case on the matter; and that further action can only be taken after the pronouncement of the court. | 164 |