apsea policy paper on devolution

Policy Brief on Devolution

8thOctober2011

A Focus on Administration

& Finance

2 | P a g e A P S E A P o l i c y B r i e f o n D e v o l u t i o n

Contents:

Abbreviations .................................................................................................................... 3

Foreword (Message from APSEA Chairman) ............................................................... 4

................. Error! Bookmark not defined.

Think Tank Membership: ................................................................................................ 6

Introduction: ..................................................................................................................... 7

Background and Context: ................................................................................................ 8

Think Tank Objectives: .................................................................................................... 9

Description of Tasks to be carried out: ........................................................................... 9

Brief History leading to the new constitution: ............................................................. 12

Devolution:....................................................................................................................... 14

Devolved Government: ................................................................................................... 17

Administration Model: ................................................................................................... 26

Recommendations: .......................................................................................................... 28

Finance Model: ................................................................................................................ 30

Key Constitutional Highlights: ...................................................................................... 30

What Next? ...................................................................................................................... 38

Structure: ......................................................................................................................... 38

Budgeting: ........................................................................................................................ 39

Raising Revenue: ............................................................................................................. 41

Financial Administration: .............................................................................................. 43

Spending: ......................................................................................................................... 44

Auditing: .......................................................................................................................... 47

Summary Table Finance Model: ................................................................................ 48

Additional Considerations and Recommendations: .................................................... 49

Timelines:......................................................................................................................... 52

Conclusion: ...................................................................................................................... 53

Annexes: ........................................................................................................................... 54


Abbreviations

APSEA- Association of Professional Societies in East Africa

PAC - Public Accounts Committee

TOR - Terms of Reference

HON - Honourable

KADU - Kenya African Democratic Union

KANU - Kenya African National Union

ICC - International Criminal Court

PEV - Post-Election Violence

KACC - Kenya Anti- Corruption Commission

KRA - Kenya Revenue Authority

HELB - Higher Education Loan Board

PSC - Public Service Commission

NSIS - National Security Intelligence Service


Foreword Message from the Chairman, APSEA

The Association of Professional Societies in East Africa (APSEA) is a professional membership umbrella

organization and is the joint forum of professional bodies within Kenya and the East African Region.

APSEA was established in 1961 and brings together professional societies, associations and institutes

from diverse professional disciplines such as medicine, law, accounting, engineering, architecture,

nursing, public and corporate administration, veterinary science, geology, surveying, planning,

procurement, meteorology, and marketing, among many others. The core objectives of the association

include promoting and upholding highest standards of professionalism at individual and institutional

levels; adherence to the highest levels of competence and professional conduct; adherence to ethics

and personal integrity to the highest possible standards; reliability and honesty among professionals;

provision of equal opportunities for all regardless of gender, race or creed; and enhancement of

corporate social responsibility (CSR) among professionals and the society at large.

Following the promulgation of the Constitution of Kenya, 2010, and as part of the ongoing efforts by the

Association of Professional Societies in East Africa (APSEA) to influence governance reforms in Kenya,

our organization has developed a County Government Model in line with the devolved governance

structure highlighted in the Kenya Constitution, 2010. Further, this proposed county model has been

divided into two and consists of two county sub-models, one on Administration and the other on

Finance.

Devolution is a key area in the constitution and marks a radical departure from the way Kenya has been

governed in the past. Despite its importance, there is lack of unanimity and a clear picture amongst

Kenyans and even amongst a wide section of professionals as to what devolution really portends for the

country as envisaged by the Constitution of Kenya, 2010. Through the proposed APSEA county model, it

is our sincere hope and desire that by sharing our vision of the devolved county government structure,

APSEA will provide some clarity to ensure that devolution is implemented efficiently and according to

the spirit and letter of the Constitution of Kenya, 2010. It is our hope and prayer that this proposed

County Government Model will be a guiding light for all professionals as they actively participate in

implementing the Kenya Constitution, 2010 and in bringing about positive lasting change to our

beautiful country and to the East African region as a whole.

Thank You and May God Bless Kenya.

Chairman, APSEA


ACKNOWLEDGEMENTS

The Chairman of the Public Affairs Committee (PAC), APSEA:

On behalf of members of the Public Affairs Committee (PAC) of APSEA, I would like to take this opportunity to thank all those who were involved in the development of this most important document- the proposed APSEA County Government Model Structure.

Firstly, I would like to most sincerely thank the fellow members of the APSEA Think Tank on Devolution

(ATTD) who devoted their time, effort and expertise to ensure that the model that was developed is in

line with the Constitution of Kenya, 2010. These members have, in our opinion, offered the most

suitable governance structure for the soon-to-be implemented county government system. The

members of the Think Tank were drawn from various membership organizations in APSEA and

represented disciplines with critical interest in devolution. The organizations included the Kenya

Institute of Planners (KIP); the Institute of Certified Public Secretaries of Kenya (ICPSK); the Institute of

Certified Public Accountants of Kenya (ICPAK); the Architectural Association of Kenya (AAK); the Law

Society of Kenya (LSK); the Institution of Surveyors of Kenya (ISK); the Association of Consulting

Engineers of Kenya (ACEK); the Kenya Medical Association of Kenya (KMA); and the Geological Society of

Kenya (GSK). APSEA is deeply honoured to have had the contributions of these most able professionals.

Secondly, I would also like to recognize and thank members of the Public Affairs Committee of APSEA

who formulated and conceptualised this whole project. It is these PAC members who proposed the

formation of the APSEA Think Tank on Devolution (ATTD)and designated this most important duty to the

Think Tank.

Lastly, I would like to thank ACT! Kenya (formerly Pact Kenya) and USAID whose continued generous

support has made this project possible.

Thank You All and May God Bless You.

Felix O. Okatch Convenor of the Public Affairs Committee, APSEA


Think Tank Membership:

NO NAME ASSOCIATION

1. Dr. Daniel Ichangi APSEA, Chairman

2. Mr. Felix Okatch APSEA, PAC Chairman

3. Mrs. Sophie Moturi APSEA, ACIOC Chairperson

4. Mr. Collins Kowuor Institution of Surveyors of Kenya (ISK)

5. Mr. Isaac Wamaasa The Law Society of Kenya (LSK)

6. Mrs. Kenya Institute of Planners (KIP)

7. Eng. KariukiMuchemi The Association of Consulting Engineers of Kenya

8. Mr. George Nyaega Obare Institute of Certified Public Accountants of Kenya (ICPAK)

9. Arch. Jaspal Singh The Architectural Association of Kenya (AAK)

10. Dr. A Suleh The Kenya Medical Association of Kenya (KMA)

11. Erastus K Gitau Institute of Certified Public Secretaries of Kenya (ICPSK)


Introduction:

With the passing of the new constitution, there is clearly a need for professionals to take a

position on various issues that will help in its implementation.

It is from this understanding that APSEA formed an eleven member team from its member

associations to develop a policy brief on devolution focusing on Administration and Finance

bases on the following terms of reference:

1. county structure on devolution.

2. Develop a model on Administration and Financeusing the guidelines and philosophy of the Think Tank that is consistent with the new constitution.

3. Take account of proposed bills and existing legislation in relations to the tasks set out.

4. Point out challenges of implementation of the constitution in relation to devolution and

give recommendations on the same.

5. Stick to the laid out timelines to ensure the policy brief, and the model on Administration and Financeare completed promptly.


Background and Context:

The Association of Professional Societies in East Africa (APSEA) is the umbrella body and joint

forum of professional associations and societies in Kenya, with a corporate membership of

thirty (30) professional associations from diverse professional disciplines. The corporate

member associations have a total membership of nearly 50,000 individual professionals in

Kenya alone. Professionals and professionalism is embedded within the Constitution of Kenya

and as such, as the joint forum of all professionals in Kenya, APSEA has a stake in the

implementation of the constitution. Devolution is a key area in the constitution and marks a

radical departure from the way Kenya has been governed in the past. Despite its importance,

there is a lack of a clear picture amongst Kenyans and even amongst a wide section of

professionals as to what devolution portends for the country as envisaged by the constitution.

It is therefore the role of APSEA as the joint forum of professional associations and, therefore,

professionals in general to show the way in implementing devolution in Kenya.

Devolution of leading professionals which shall act as a guide to APSEA and professionals in

general on their role in implementing devolution and overall better governance in Kenya. As

part of its mandate, the Think Tank was to oversee the development of a county government

model (on Administration and Finance); develop one Policy Paper on the Role of Professionals

on Devolution; develop a Concept Paper on the planned APSEA National Conference on

Devolution; and develop a Concept/Policy Paper and Advertisements on the Position of

Professionals in Devolution, among other related activities. These activities shall provide

greater clarity as to what devolution entails and means for Kenya before its operationalisation.

The Think Tank was expected to work in liaison with the relevant committees of APSEA

especially the Public Affairs Committee (PAC) and the APSEA Constitution Implementation

Oversight Committee (ACIOC).


Think Tank Objectives:

The objectives of this Think Tank were as follows:

1. To enhance a greater understanding of devolution amongst professionals and the

country as a whole.

2. To think through matters of devolution and develop policy/position papers on the

implementation of the same.

3. To provide a professionals perspective in relation to the implementation of devolution

in Kenya.

The following were among the specific project goals:

I. Design of Terms of Reference (TORs) for a county government model, on Administration

and Finance.

II. Development and periodically review the Policy/Position Papers.

III. Develop and design the model on Administration and Finance.

IV.

V. Organization on the planned Civic Education Forums on Devolution.

Description of Tasks to be carried out:

In order to meet the above objectives, APSEA sought the services of ELEVEN competent

professionals from different fields/ associations. The following were the description of the

activities and organization of the Think Tank:

I. Time frame:

The Think Tank beganits mandate in July, 2011 until September, 2011.

II. Think Tank Description:

The Think Tank comprised ELEVEN (11) members drawn from professional associations and

bodies. The Think Tank was multidisciplinary in nature so as to obtain the views and input of


experts in the various fields that were directly related to devolution. In line with this, the

following associations/ bodies nominated a member each to represent them in the Think Tank:

1. The Law Society of Kenya (LSK).

2. Kenya Institute of Planners (KIP).

3. Institute of Certified Public Secretaries of Kenya (ICPSK).

4. Association of Consulting Engineers of Kenya (ACEK).

5. Institute of Certified Public Accountants of Kenya (ICPAK).

6. The Architectural Association of Kenya (AAK).

7. Institution of Surveyors of Kenya (ISK).

8. The Kenya Medical Association (KMA).

9. The Public Affairs Committee (PAC) of APSEA.

10. APSEA Constitution Implementation Oversight Committee (ACIOC).

11. The Chairman of APSEA.

The Think Tank met for a number of sittings during which discussions were held covering the

following key issues related to devolution and the role of APSEA in it:

The planned Administration and Finance county models: their description,

characteristics, and workability.

The role of professionals in devolution and the devolved government structure. A

Position Paper and an advertisement message in the media on the same to be

developed.

The planned APSEA National Conference on Devolution; the discussions to be held

therein; the mode/form of the discussions to be held; the participants to be invited; and

funding of this conference. A concept paper on the same to be developed.


III. Deliverables and other provisions:

The Think Tank was, at the end of its sittings,was to provide APSEA with the following:

A county government model: on Administration and Finance.

At least one (1) Policy/Position Paper on Devolution.

A concept paper on the planned APSEA National Conference on Devolution.

Direction on the message in the media that will be in form of an advertisement on the

position of professionals on devolution and the constitutional issues that will be current

at that time.


Brief History leading to the new constitution:

Kenya was a British colony until June 1st 1963 when the country got internal self-independence.

This was followed by full independence, which was celebrated on 12th December 1963.At

Independence, elected first prime minister was Hon. Jomo Kenyatta. He was head of

government while the head of state was still Queen Elizabeth II of the United Kingdom

represented by the Governor General.

In 1964, Kenya became a Republic and the Prime minister Hon.Jomo Kenyatta subsequently

assumed the presidency of the Republic of Kenya. The unitary system of combining all functions

of the government began.

Prior to independence in 1963, there were politics of devolution. The KADU party which had

members like Ronald Ngala, MasindeMuliro, D.T. Moi, J. K. Tipis, Martin Shikukuamong others

advocated for devolved government. By that time the devolved system of government was

referred to as majimbo. Majimbo is a Swahili word which refers to a region or regional. At that

time there were no well thought of structures on devolution as it is enshrined in the current

constitution.

The party which formed the government in 1963 was KANU. It was opposed to majimbo,

regionalism, or devolution. It was led by JomoKenyatta, JamesGichuru, OgingaOdinga,

TomMboyaamong others. They were advocating for a unitary government.

Since 1963, the country has had many elections and faced several challenges. The elections

have been held in the years 1966 (the Little General Elections), 1969, 1974, 1979, 1983 (snap

elections), 1988, 1992, 1997, 2002 and 2007 which host the current 10th parliament. In 14th

October, 1978 Daniel ToroitichArapMoi was sworn in as the second president of Kenya.


Past general and presidential elections in Kenya and milestones are as below:

Year Milestones President

1963 Independence; KANU won elections with a majimbo system Jomo Kenyatta

1966 Little general elections, first opposition party KPU Jomo Kenyatta

1969 Constitutional Consolidation of Unitary System of Government; Jomo Kenyatta

1974 KANU locked out candidates deemed opposed to the

government system

Jomo Kenyatta

1979 Nyayo era continuation of unitary system Daniel Moi

1983 Elections were preceded by the constitutional amendment

making KANU the only political party

Daniel Moi

1988 Queue System (Mlolongo), the selection of candidates by

queuing behind candidates and the candidate who obtained

70% of the votes was automatically elected

Daniel Moi

1991 A landmark decision was made where the constitution was

amended to remove Section 2(a) thereby returning the country

to multiparty democracy reversing the decision made in 1982

Daniel Moi

1992 Multi-party elections Daniel Moi

1997 Multi-party elections Daniel Moi

2002 Multi-party elections, NARC won the elections MwaiKibaki

2007 Disputed results following Multi-party elections leading to Post

Election Violence resulting in deaths and displacement of

people

MwaiKibaki

2008 Signing of the National Accord leading to a Coalition

Government between PNU and ODM

MwaiKibaki

2010 Promulgation of New Constitution MwaiKibaki

The majimbosystem constitution consisted of 8 regions and it was considered to be a federal

system, while the current system is one of devolution (Ugatuzi) characterized by unity and

diversity and no single county can now threaten to secede from the country.


Devolution:

This is the devolving of power by central government. It includes the delegation of power,

especially central government to local or regional administration, it encompasses decent or

passing through series of stage for example legislation, judiciary, executive and many more

(Webster dictionary).

Since independence in 1963, the founding fathers of the nation emphasized the need of having

power at the centre. Nairobi the capital city was and still is the centre of major government

functions. The founding fathers saw that this system was good to unify the country after the

It is worth noting that the struggle for

Independence started quite early bearing in mind that in 1922, protestors were shot dead near

Norfolk Hotel and some freedom fighters were deported to Kisimayu (which was part of Kenya

until 1925).

However, over time, things have changed. The events leading to a new constitution illustrate

that the centre cannot fully hold.

In the words of famous Nigerian author Chinua Achebe in his novel

Turning and turning in the widening gyre;

The falcon cannot hear the falconer;

Things Fall Apart, the centre cannot hold,

mere anarchy is lo

Kenya had Majimbo (Federalism) in pre-independence as propagated by KADU. Now in the year

2010, we have a devolved system (Ugatuzi) as entrenched in the Constitution.

It is now upon professionals to be involved and take specific target and time from actions to

make the second coming work.


For APSEA as the overall professional body, it must be jointly and severally involved for success

of devolution. Therefore, the policy paper on devolution with respect to county administration

and finance is indeed timely.

Case Study 1: TheUnited Kingdom:

Since 1999, the way the United Kingdom is run has been transformed by devolution - a process

designed to decentralise government and give more powers to the three nations which,

together with England, make up the UK.

The United Kingdom is made up of England, Wales, Scotland and Northern Ireland.

Devolution essentially means the transfer of powers from the UK parliament in London to

assemblies in Cardiff and Belfast, and the Scottish Parliament in Edinburgh.

Devolution: The views from Scotland, Wales and Northern Ireland

When did it begin?

Public votes were held in 1997 in Scotland and Wales, and a year later in both parts of Ireland.

This resulted in the creation of the Scottish Parliament, the National Assembly for Wales and

the Northern Ireland Assembly. Devolution applied in different ways in each nation due to

historical and administrative differences.

What powers are devolved?

The table below gives an overview of the main powers given to the Northern Irish and Welsh

assemblies, and the Scottish Parliament.

MAJOR DEVOLVED POWERS

SCOTLAND WALES N. IRELAND

Agriculture, forestry & fishing Agriculture, forestry & fishing Agriculture

Education Education Education

Environment Environment Environment

Health Health & social welfare Health

Housing Housing Enterprise, trade & investment


MAJOR DEVOLVED POWERS


Justice, policing & courts* Local government Social services

Local government Fire & rescue services Justice & policing

Fire service Highways & transport

Economic development Economic development

Some transport

*Scotland has always had its own legal system and education system

What powers are not devolved?

The UK government is responsible for national policy on all powers which have not been

devolved.

These are known usually as "reserved powers" and include foreign affairs, defence,

international relations and economic policy.

This table gives an overview of the main non-devolved powers.

MAJOR NON-DEVOLVED POWERS


Constitution Defence& national security Defence& national security

Defence& national security Economic policy Foreign policy

Foreign policy Foreign policy Nationality

Energy Energy Energy**

Immigration & nationality Immigration & nationality

Trade & industry [see footnote +]

Some transport

Social security

** - specified as "nuclear energy & installations"

+ - Non-devolved powers in Wales are by implication all those not set out in the 2006

Government of Wales Act.

The Westminster Parliament is technically still able to pass laws for any part of the UK, but in

practice only deals with devolved matters with the agreement of the devolved governments.


Case Study 2: South Africa:

South African Cape Town is divided into sub-councils. The Cape Town city is dividedin to sub-

municipalities and the councilorswho come from the areas constitute thesub-council for the

area to manage urban areas that form part of the county.

Looking at this comparative experience ofSouth Africa, we shouldenact a framework legislation

providing fora general framework for furtherdecentralization and governance of citiesand

urban areas.

Devolved Government:

Objects and principles of devolved government

Objects of devolution (Article 174)

The objects of the devolution of government are:

a) to promote democratic and accountable exercise of power:

b) to foster national unity by recognising diversity;

c) to give powers of self-governance to the people and enhance the participation of the

people in the exercise of the powers of the State and in making decisions affecting them:

d) to recognise the right of communities to manage their own affairs and to further their

development;

e) to protect and promote the interests and rights of minorities and marginalised

communities;

f) to promote social and economic development and the provision of proximate, easily

accessible services throughout Kenya;

g) to ensure equitable sharing of national and local resources throughout Kenya;

h) to facilitate the decentralisation of State organs, their functions and services, from the

capital of Kenya; and

i) to enhance checks and balances and the separation of powers.


Distribution of functions between the National and County governments: (Fourth Schedule-

Article 185(2), 186(1) and 187(2)

Part 1 - National Government

1. Foreign affairs, foreign policy and international trade.

2. The use of international waters and water resources.

3. Immigration and citizenship.

4. The relationship between religion and state.

5. Language policy and the promotion of official and local languages.

6. National defence and the use of the national defence services.

7. Police services, including -

a) the setting of standards of recruitment, training of police and use of police services;

b) criminal law; and

c) Correctional services.

8. Courts.

9. National economic policy and planning.

10. Monetary policy, currency, banking (including central banking), the incorporation and

regulation of banking, insurance and financial corporations.

11. National statistics and data on population, the economy and society generally.

12. Intellectual property rights.

13. Labour standards.

14. Consumer protection, including standards for social security and professional pension plans.

15. Education policy, standards, curricula, examinations and the granting of university charters.

16. Universities, tertiary educational institutions and other institutions of research and higher

learning and primary schools , special education, secondary schools and special education

institutions.

17. Promotion of sports and sports education.

18. Transport and communications, including, in particular -

a) road traffic;

b) the construction and operation of national trunk roads;


c) standards for the construction and maintenance of other roads by counties;

d) railways;

e) pipelines;

f) marine navigation;

g) civil aviation;

h) space travel;

i) postal services;

j) telecommunications; and

k) radio and television broadcasting.

19. National public works.

20. Housing policy.

21. General principles of land planning and the co-ordination of planning by the counties.

22. Protection of the environment and natural resources with a view to establishing a durable

and sustainable system of development, including, in particular-

a) fishing, hunting and gathering;

b) protection of animals and wildlife;

c) water protection, securing sufficient residual water, hydraulic engineering and the

safety of dams; and

d) energy policy.

23. National referral health facilities.

24. Disaster management.

25. Ancient and historical monuments of national importance.

26. National elections.

28. Health policy.

29. Agricultural policy.

30. Veterinary policy.

31. Energy policy including electricity and gas reticulation and energy regulation.

32. Capacity building and technical assistance to the counties

33. Public investment.


34. National betting, casinos and other forms of gambling.

35. Tourism policy and development.

Part 2-County Governments

The functions and powers of the county are-

1. Agriculture, including

a) crop and animal husbandry;

b) livestock sale yards;

c) county abattoirs;

d) plant and animal disease control; and

e) fisheries.

2. County health services, including, in particular -

a) county health facilities and pharmacies;

b) ambulance services;

c) promotion of primary health care;

d) licensing and control of undertakings that sell food to the public

e) veterinary services (excluding regulation of the profession);

f) cemeteries, funeral parlours and crernatoria; and

g) refuse removal, refuse dumps and solid waste disposal.

3. Control of air pollution, noise pollution, other public nuisances and outdoor advertising.

4. Cultural activities, public entertainment and public amenities, including-

a) betting, casinos and other forms of gambling;

b) racing;

c) liquor licensing; unities and

d) cinemas; immunities

e) video shows and hiring;

f) libraries;

g) museums;

h) sports and cultural activities and facilities; and


i) county parks, beaches and recreation facilities,

5. County transport, including-

a) County roads;

b) Street lighting;

c) Traffic and parking:

d) Public road transport; and

e) Ferries and harbours, excluding the regulation of international and national shipping

and matters related thereto.

6. Animal control and welfare, including-

a) Licensing of dogs; and

b) Facilities for the accommodation, care and burial of animals.

7. Trade development and regulation, including-

a) Markets;

b) Trade licenses (excluding regulation of professions);

c) Fair trading practices;

d) Local tourism; and

e) Cooperative societies.

8. County planning and development, including-statistics;

a) land survey and mapping;

b) boundaries and fencing;

c) housing; and

d) electricity and gas reticulation and energy regulation.

9. Pre-primary education, village polytechnics, homecraftcentres and childcare facilities.

10. Implementation of specific national government policies on natural resources and

environmental conservation, including-

a) soil and water conservation; and

b) forestry .

11. County public works and services, including-

a) storm water management systems in built-up areas, and


b) water and sanitation services.

12. Fire fighting services and disaster management.

13. Control of drugs and pornography.

14. Ensuring and coordinating the participation of communities and locations in governance at

the local level and assisting communities and locations to develop the administrative

capacity for the effective exercise of the functions and powers and participation in

governance at the local level.


Mind Map on National Government Functions:


Mind Map on County Government

Functions:


Administration Model:

Definition:

Administration is the act or process of executing of public affairs as distinguished from policy

making, especially the management of government or large institutions; the activity of

government or state in the exercise of its powers and duties.

County Public Services:

Suitable organisation structure for the national and county governments will be fundamental in

facilitating the effective service delivery and discharge of the functions assigned to both levels

of government by the constitution. The National Government will ensure the following:

1. Legal framework for a County public service to provide for staffing of county governments

as provided for under article 235.

2. Audit the existing human and technical capacities in the public service disaggregated into

different cadres to determine the number of employees and the skills available in the civil

service, local authorities, state corporations and regional bodies in order to facilitate re-

distribution and deployment of staff to counties.

3. Facilitate deployment of existing capacity, avoid staff retrenchment and avoid overstaffing

once the countries are operational.

4. A framework for harmonisation of the terms and conditions of service for both the national

and country staff.

5. Develop a capacity building framework that identifies human resource and institutional

capacity gaps and specific interventions especially on; training programmes, optimal

staffing; financial requirements, physical infrastructure (office facilities etc) aimed at

equipping identified county staff with skills necessary to deliver functions at the county

government level.

6. Undertake institutional capability assessment for all the government. Training Institute to

determine their readiness to effectively implement training and capacity building

programmes for transforming the public service.


7. Develop and implement training programmes that target the political leadership,

permanent secretaries, Chief Executive Officers of state corporations and Head of

Department on legal and policy implication of the constitution.

8. Facilitate cooperation between the various levels of government and establish reporting

system that would enhance the coordination of all public service staff in the country.

9. Develop guidelines on the development of organisational structures and staff establishment

to be used by county governments consistent with the distribution of functions for both

national and county governments at the county level. This will assist county governments in

having an initial framework for the establishment and abolition of offices.

10. Develop a phased implementation plan based on the timeliness stipulated in the

constitution.

County Government Overall Administrative structure


County Government Administrative structure

Recommendations:

1. The people running the county should be visionary, qualified and competent. In case the

professionals lack in a particular county, the same can be outsourced to avoid cases where

counties are run by unqualified individuals simply because they hail or not hail from a

particular area or region/county.

2. The watchdog bodies need to be incorporated in the devolved governments and have

representatives for purpose of checks and balances within the county governments.

Independence of the County Public Service Authority and County Public Service Board is

critical.


3. The county government should engage with professional bodies both for advice and staffing

process.

4. All appointments should have performance contracts tied to them. In the event of lack of

performance. There must be clear recourse detailed.

5. The minimum qualification for a governor and the deputy should be at least a University

degree from a recognized university.

6. Must meet the leadership and integrity test as per Chapter Six of the Constitution of Kenya

7. There is great need to enhance efficiency and accountability.

8. There must be very strict guidelines to ensure the vetting process is not abused. Minimum

qualifications, clearance certificate from various bodies like KRA, NSIS, HELB, KACC, The

Kenya police etc should be demanded during the vetting process.

9. Systems for reporting back to the citizens need to be in place in form of regular

10. There must be regular sensitisation of the citizens on their rights and expectations from the

administration in the respective counties using the media and key personalities.

11. Mandatory awareness programmes need to be integrated into the school curriculums.

12. There needs to be enhanced efforts to create public awareness and citizen involvement to

demand proper management at both National and County governments and hold all

governors accountable.

13. Transparency and accountability must form the founding stones if good governance is to be

achieved.

14. There needs to be clarity in the process of devolution from the current system to the new

system to avoid any confusion as currently exists.

15. Bribery and forms of corruption need to allow for stepping aside to be mandatory to allow

for investigations to take place without interference with reduced pay of upto 50% pending

investigations.

16. Vetting bill should apply at county level.


Finance Model:

The finance model is to address the various aspects in the devolved government with bias to

the financial aspects largely spelled out in Chapter 12 and other related legislation in the new

dispensation.

It aims at critically analyzing various legislations and giving professional critique and guidelines

on how best the implementation should be carried out and the controls that can enhance the

collection, administration, control and general management of funds in the devolved structure.

The financial management of a county will fall under a chief secretary, who will account for all

the county budget, revenue, expenditure and also responsible for internal audit of all county

financial reports. This county chief secretary is responsible for fiduciary care of county assets

and liabilities.

Key Constitutional Highlights:

1. Two levels of Government Article 1 (3) & (4)

This is an important article as it gives guidance on where the sovereign power of the people is

vested i.e. the National level and the Country level. This in turn lessens the confusions around

the existing structures in relations to the new dispensations.

The stand is that the models should strictly adhere to the two levels of governance.

2. Raising Revenue Article 209 & 210

Article 209 provides that county governments may raise their own revenues by imposing taxes

and charging fees for services (but this should not be done in a way that prejudices national

economic policies, economic activities across county boundaries or the national mobility of

goods, services, capital or labour as per Article 209 (5). The taxes and charges that county

governments can charge include:

a) property rates;

b) entertainment taxes; and


c) Any other tax that county governments may be authorised to impose by an Act of

Parliament (Article 209 (3c).

d) fees and charges (i.e. on housing, offices, parks, markets etc)

Recommendations:

The national government ministries/departments and state corporations should honour their

property rates payment obligations to county governments or municipal authorities. There

need to be an adoption of an arrears service cost basis that is legally enforceable, the rates

applicable should be punitive to force compliance. Adoption of a policy of not carrying old

liabilities/obligations in the book by allowing for set-offs against any funds due will also assist.

The Constitution is very clear as to sources of finances for the two levels of government. We

must live by the provision. Any additional taxes to the county governments, to be authorised by

the Act of Parliament envisaged under Article 209 (3c) should not prejudice national economic

policies, economic activities across county boundaries or the national mobility of goods,

services, capital or labour as provided under Article 209 (5).

3. Borrowing powers Article 211, 212& 213

Article 212 provides that a county government may borrow only:

a) if the national government guarantees the loan; and

b) ssembly. Article 213 also provides that an Act of parliament shall prescribe terms and conditions under

which the national government may guarantee loans.

Recommendations:

Borrowing by the counties must be governed by the national government debt management

policy. A county seeking to borrow must show how it plans to finance the loan and retire it

within the agreed period.


It is important to highlight that county government debt shall be sourced for the exclusive

purpose of funding developmental expenditures.

Subsequent loans should only be considered by the national government for guarantorship if

the objectives of the previous loans were met and if previous loans never yielded any liabilities

on the national government.

It would be important to identify the maximum level of debt any particular county can be

product and should be implemented.

The counties should be called upon to periodically give a statement of their county debt book

to highlight the status of servicing of such loans. This will be litmus for prevention of excess

commitments that can lead to defaults/financial distress on their side.

4. Equitable resource sharing Article 202 & 203

Article 202 provides that revenues raised nationally shall be shared equitably among the

national and county governments; and that

a) County governments may be given additional allocations from the national

b) Article 203 (2) further prov

that is allocated to county governments shall not be less than fifteen per cent of all

Recommendations:

fifteen per cen

suggests county governments may in successive years be allocated more money from the

national revenues, hencethe objective basis the

safeguards that need to be provided either in policy or legislation to guard against possible

abuse for such additional revenue allocations are required.

The following suggestions should be considered:

The capacity of the county to absorb the funds. They must have the following

requirements: qualified human resources and infrastructure


How well has the county structure been accountable with the resources previously

allocated to them; the better accountable the system is, the better the chance to

receive more allocations in future. This is to be determined exindependent audit

reports from the office of the Auditor General.

How prudent were the counties in applying the funds allocated and funds absorption

rate given their approved budgets for the period. A county that observes prudence in

the application of the fund to their pre-approved programs should be by all means a

candidate for increased funding by the national government;

To what extent is the County Government contributing to the realization of regional

development and/or national targets like Vision 2030. The more the funds are applied

towards enhancing the productive capacity of the counties, then the more funding

should be channeled though. This communicates that the county system offers an

effective alternative route to development from the centralized system.

Additional fund allocations can also be based on the periodically established poverty

index to have a fairly well nation as also recognized and applied in the distributions of

funds from CDF kitty. However, these numbers need to be properly vetted and

established per county unlike per constituency for CDF by an independent credible

institution.

Additional allocations can also be pegged on catastrophes/calamities.Where a

particular county is befallen by natural disasters like floods/droughts; they can be

allocated a little extra to enable contain such a happening besides what they can get

from the contingency funds.

Another important aspect is if the current devolved funds (such as CDF, LATF, Road

Maintenance Levy Fund (RMLF), Youth Enterprise Fund, Women Enterprise Fund, Bursary

Funds, etc) should continue operating as they currently do or should such funds be channeled

and managed by the County Governments.

The County government structure has offered a more structured approach to devolution. In

regards to the continued existence of the current devolved funds the following should be

considered:


The county system offers better structure to oversee decentralized regional

development, with better governance that with proper staffing would sufficiently

support the implementation of the devolution;

The existing numerous devolved funds have not contributed to efficient resource

allocation. We have in most cases seen duplication of projects resulting from the

devolved funds operating as independent funds with different mandates. There will be

need to amalgamate these funds under the executive management of the Governor;

The element of cost effectiveness of the devolved funds would highlight the need to

centralize their implementation through a single point, through the county funds; and

The governance of most of the current devolved funds has been very fluid. Tying

accountability to the utilization has therefore been a big challenge. The institutional

frameworks of these funds have in most cases yielded conflicts of interest by the

persons charged with the management of these funds. To avoid this mishap, we

propose channeling all devolved funds through the counties.

5. Public land held by Local Authority in trust Article 62

Land being an illusive subject, it is upon which the economy thrives hence the legislation

around land has to be clear to ensure smooth transition, especially who own what and who has

control over what.

6. Further devolution Article 176

Article 176 provides for furtherdevolution of functions by countygovernments to ensure

effective servicedelivery. Under this article, the countygovernments may create other

structuresbelow the county.

Recommendations:

The nature and form of such furtherdevolution is a matter to beaddressed through legislation.

This further devolution should however not lead to duplication of duties or extra burden to

taxpayers.


7. Governance of Cities & Urban areas Article 184

Article 184 requires that national legislation does provide for the governance and management

of cities and urban areas.

Recommendations:

These clauses however come with challenges which we must seek to resolve. We certainly

require different rules for the governance and management of Nairobi and Mombasa which are

Cities and Counties at the same time.

8. Equalization Fund Article 204

a) Article 204 provides for the establishment of an Equalization Fund into which shall be

paid one half percent of all the revenue collected by the national government each

financial year.

b) The Equalization fund will however be restricted to the provision of basic services

including water, roads, health facilities and electricity etc. to marginalized areas to bring

the quality of these services in such areas to the level generally enjoyed by the rest of

the nation, to the extent possible.

Recommendations:

The basis for determining marginalization shall be the level of disparity of a region from a

modestly developed region. To establish the level of marginalization, we should consider the

basic infrastructural developments established in a region in terms of availability of water,

roads, lighting, social amenities such as health facilities, schools. The ease of access to the

infrastructural facilities would be a factor to consider as well the susceptibility of a region to

suffer natural calamities.

Each county exists as an independent governance unit with clear and well demarcated

objectives. The Articles of the Constitution creating the County governments have also

acknowledged this fact. For ease of administration, each County should be treated as

independent unit of governance to which an allocation out of the Equalization fund shall be

due so long as the County Management proves the existence of marginalization.


Each County shall therefore establish its own County Equalization Fund that is auditable and

reports generated. Just like in any cost centre, the implementation of the Equalization fund

shall require that strong systems of internal controls are put in place, together with a sound

financial management system that will assess the prudence in the implementation of the fund.

9. Revenue Fund for County Government Article 207

The article gives power for the establishment of a Revenue Funds for each county government

into which shall be paid all money raised or received by or on behalf of the county.

Strict laws should be put in place for the withdrawal of monies from this find to ensure the

Controller of Budgets has approved and it is in line with the approved budget.

10. Contingencies Fund Article 208

Article 208 provides for the establishment of a Contingencies Fund, which shall be operated in

accordance with an Act of Parliament to be enacted. The envisaged Contingencies Fund Act

shall provide for advances from the Contingencies Fund if the Cabinet Secretary responsible for

finance is satisfied that there is an urgent and unforeseen need for expenditure for which there

is no other authority

Recommendations:

The County units are the basic units of governance as per the Constitution and will therefore be

the focal points of the emergencies that have been envisaged by the creation of this fund. The

participation of County in response to emergencies is thus critical, both at identification and

management.

Response to emergencies is a matter of national concern that amount uptake of national

resources. The processes of emergency management must therefore the minimum thresholds

of public financial management.

It must be a participatory process not left to the whims of the Cabinet Secretary responsible for

Finance. Each response to emergencies should be treated as a project whose accounting and


audit should be completed within reasonable time. We suggest emergency alerts to originate

from the respective counties and to be finally approved by the National assembly.

Other very important organs in county governance include the following:

1. Commissions on Revenue Allocation and its functions - Articles 215& 216

2. Salaries and Remuneration Commission - Articles 230

3. Controller of Budget Article 228

4. Auditor General - Article 229

5. Division of Revenue- Article 217

6. Budget estimates and annual Appropriation Bill Article 221


What Next?

Talent wins games, but teamwork and intelligence win championships

Structure:


Budgeting: Budgeting Diagram:

Budgeting helps allocate resources to priority areas and a good a balance between

developmental and recurrent expenditure. Alignment to the national government is key, to

ensure that the counties are funded as they will be perceived to be insync with the national

vision.

The chief secretary of county is the main financial accounting officers for the county.

Responsibility of preparing county budget in line with central government Budget Strategy

Paper must be done in time for a county. The preparation of budget has to be inclusive and

consider issues like:

Current economic situation

Economic policy and outlook

Fiscal policy and outlook

Financial issues related to banking and moneys

Medium term and resources allocation etc.


Budget framework to include, Revenue projections, Expenditure forecast, overall deficit

financing if any.

The financial framework will draw up annual and monthly budgets.

This budget should provide the county with administration support.


Raising Revenue:

1. Allocation from NG 15% - Article 203 (2)

2. Taxation Article 209 (3-5)

3. Equalization Fund 0.5% Article 204

4. Production & Sales Article 209 (4)

5. CDF, LATF, RMLF, Bursary Fund?

6. Appropriation In Aid (AIA)

7. Borrowing Article 212

Current Devolved Funds

1. Constituency Development Funds (CDF)

2. Local Authorities Trust Fund (LATF)

3. Free Primary Education Fund

4. Constituency Bursary Fund

5. Road Maintenance Levy Fund (RMLF)

6. Youth Enterprise Development Fund

7. Women Development Fund

8. Poverty Eradication Loan Fund

9. Water Services Trust Fund

10. HIV/AIDS Community Initiative Account

11. Community Development Trust Fund

12. Rural Electrification Programme Levy Fund


Raising Revenue Diagram:

There need to be means and ways of collecting revenues efficiently using competent

professionals at the county level.


Financial Administration:

1. The county chief secretary

2. The county secretary responsible for finance

3. All other county principal secretaries responsible for managing respective books of

accounts.

All officers of county government, subject to the chain of command, are responsible for county

budget preparation, revenue collection and prudent spending for a county. These financial

activities are subject to auditing by both internal and external auditors i.e. Kenya National Audit

Office.

Financial Administration Diagram:

Administration has to be accompanied with expertise and transparency.

Recruitment of professional in this function is a must if efficiency and accountability have to be

realized.


Spending:

As far as expenditure is concerned the chief secretary and staff reporting to him/her must

ensure that the accounting officers of county government make payments according to Acts of

parliament, ministerial directives and departmental circulars. This means that an effective

system of expenditure control, including procedure, for approval, authorization, withdrawal

and payment of funds in carried at prudentially for the benefit of county government.

Spending need to be in both developmental and recurrent expenditure as below:

Development Expenditure:

1. Agriculture & Rural Development

Infrastructure for modern farming and transport network to facilitate delivery of firm produce.

2. Physical Infrastructure

This should be strategic to ensure inter & intra county connectivity. Road, rail, air and

technological enhancement.

3. Environment, Water & Sanitation

Reservation of the environment, clean water projects should be considered.

4. HR Development

This is capacity building and investment in education as well.

5. Research Innovation & Technology

Research especially in higher education and in entrepreneurship should be enhanced.

6. Trade, Tourism & Industry

Trade tourism and industries should be funded as well.

Recurrent Expenditure:

1. Governance, Justice, Law & order

Governance is key for any effective system to run. There have to be justice mechanisms in the

devolved structure.

2. Public Administration


Security within counties has to be considered in allocation. Clarity on the role of National

government and County governments has to be clear.

3. Special Programmes

Every county has unique projects that may be specific to that county. Proper vetting should be

done to ensure that the special projects are funded and completed to serve the intended

purpose.

4. County Security

County security will determine the attractiveness of the county to the investors. Both the

National Government and the County Governments have a responsibility to ensure adequate

security.

Spending Diagram:


Controlling Revenue:

Controlling Revenue Diagram:

Revenue control is elusive and mechanisms should be put in place to enhance efficiency.

Professionalism and involvement of experts is fundamental for this to be successful.

No expenditure should be incurred if it has not been budgeted for or if it does not meet the laid

down procedures and conditions.


Auditing:

All the revenues and expediting of the county shall be audited by the auditor general.

There shall however be established an internal audit unit that shall report to an independent

audit committee of the country.

All these accounting functions should be carried out by professionals who are qualified as per

the requirement of the board currently registering accountants in Kenya.

Auditing Diagram:

Auditing is the best was to review systems and enhance efficiency. The choice of the team to

handle the audit has to be professional and independent.


Summary Table Finance Model:


Additional Considerations and Recommendations:

1. The people running the county should be qualified and competent. In case the

professionals lack in a particular county, the same can be outsourced to avoid cases where

counties are run by unqualified individuals simply because they hail or not hail from a

particular area or region/county.

2. The watchdog bodies need to be incorporated in the devolved governments and have

representatives for purpose of checks and balances within the county governments.

3. The county government should engage with professional bodies both for advice and staffing

process.

4. The members of the County Executive Committee under Article 179 should have the

following mix as the minimum qualifications or expertise:

a) Administration

b) Legal expertise

c) Finance

d) Investments

e) The professionals to be hired must to be members of the relevant professional bodies in

good standing.

Other basic knowledge and skill expected should be:

a) Degree from a recognized university

b) Have had a distinguished career in their respective fields

c)

i. Finance and accountancy;

ii. Management & administration;

iii. Economics;

iv. Human resource management;

v. Industrial & Labour relations;

vi. Other professional & leadership skills as applicable


5. The minimum qualification for a governor and the deputy should be at least a University

degree from a recognized university.

The expected skills should include but not limited to

a) Finance

b) Investments

c) Legal

d) Governance

6. Other additional requirements in addition to the requirements provided for under article 73

(2) include:

a) Professionalism

b) Minimum educational background

c) Meets the leadership and integrity test as per Chapter Six of the Constitution of Kenya

7. There is great need to involve professionals in this process to enhance efficiency and

accountability.

8. The professionals to be hired need to be members of the relevant professional bodies in

good standing.

9. The professionals who are mainly in capital or major cities need to be encouraged to

devolve as well in that the National government needs to support the county governments

that may not have or afford some of these professionals.

10. The internal auditors in specific counties need to be accountable to both the county

governments and national governments as the funds they monitor are from both

governments.

11. These auditors need to be members of the accountancy professional body and be in good

standing.

12. The chief executive officer of the county has the full responsibilities of the general

administration and running of the county.

The basic knowledge and skill expected of the CEO of the county should be:

a) Degree from a recognized university

b) Have had a distinguished career in their respective fields


c)

I. Finance and accountancy;

II. Management & administration;

III. Economics;

IV. Human resource management;

V. Industrial &Labour relations;

VI. Other professional & leadership skills as applicable

13. There must be very strict guidelines to ensure the vetting process is not abused. Minimum

qualifications, clearance certificate from various bodies like KRA, NSIS, HELB, KACC, The

Kenya police etc should be demanded during the vetting process.

14. To encourage professional to move from the major cities, there should be a mechanism to

determine a hardship allowance to compensate the professional to mitigate the risk of

some counties missing out on qualified individuals resisting to go and work in those areas.

15. There must be regular trainings for persons running the counties especially on fund

management, budgeting and procurement procedures.

16. There needs to be enhanced efforts to create public awareness and citizen involvement to

demand proper management at both National and County governments and hold all

governors accountable.

17. Professional bodies must be involved in their relevant areas especially in budgeting,

approvals of infrastructural projects and hiring.

18. The PSC should support the county governments in getting the right resources for the right

jobs and also to enhance fair distribution of human resource.

19. Transparency and accountability must form the founding stones if good governance is to be

achieved.


Timelines:

Week Activity Deliverable Responsibility Comment

2 Framework Presentation 18th July

2011

Felix, Sophie &

Obare

Done

2 TOR,s Consultant To be tabled on 18th

July 2011

Felix, Sophie &

Obare

Done

4 Detailed review of

Document ons Position

of Professionals on

Devolution

Come up with a Policy

Paper on Finance

Model.

Felix, Sophie &

Obare

Done - 1st

Aug 2011

6 Receive merged drafts

of all deliverables

One Policy Paper for

both Finance & Admin

Jaspal and

Obare

Done - 15th

Aug 2011

8 Receive edited

versions

Policy Paper to be

edited

Jaspal and

Obare

Done - 29th

Aug 2011

10 Review edited version To adopt/recommend

further action

Think Tank Done -12th

Sep 2011

11 Validation Workshop

at Sankara

To receive input from

various stakeholders

Okatch, Jaspal

and Obare

Done - 22nd

Sep 2011

13 Edit the documents

further

Incorporate

stakeholders input

Isaac, Jaspal

and Obare

Done - 8th

Oct 2011

14 Review edited version To adopt/recommend

further action

Think Tank 17th Oct

2011

The APSEA National Conference on Devolution

Policy Paper and Model to be presented

APSEA November 2011


Conclusion:

1. There should be consideration for Acts and Bills in place or proposed to ensure that the

laws are followed to the letter.

2. The laws governing Institutional serving counties i.e. a general hospital serving various

counties need to be in place to avoid risks of conflicting interest fighting over control,

taxes etc

3. Employment of resources at the county must be clear to helpthe current problem where

the PSC has too much control over the staffing of Local Government and that the

training of personnel should be undertaken by the government.

4. Taxes must be moderated not to stifle development.

5. There must be encouragement of vibrancy in various counties to evade the risk of lazy

tendencies by some counties so that they fall in the category of underdeveloped to

attract extra funding from the National Government.

Other important reports include:

Annual or monthly work plan

Monthly statement of status reports

Mid - year assessment reports

Reports on county website should include the following:

The annual budgets and all budget-related documents

All budget related policies

Annual reports

All performance contracts required in terms of the devolution Act

All service delivery

All long term borrowing contract etc


Annexes: FIRST SCHEDULE

Article 6 (1)

Counties

1. Mombasa 24. West Pokot

2. Kwale 25. Samburu

3. Kilifi 26. Trans Nzoia

4. Tana River 27. UasinGishu

5. Lamu 28. Elgeyo/Marakwet

6. Taita/Taveta 29.Nandi

7. Garissa 30. Baringo

8. Wajir 31. Laikipia

9. Mandera 32. Nakuru

10. Marsabit 33. Narok

11. Isiolo 34. Kajiado

12. Meru 35. Kericho

13. Tharaka-Nithi 36. Bomet

14. Embu 37. Kakamega

15. Kitui 38. Vihiga

16. Machakos 39. Bungoma

17. Makueni 40. Busia

18. Nyandarua 41. Siaya

19. Nyeri 42. Kisumu

20. Kirinyaga 43. Homa Bay

44.Migori

22. Kiambu 45.Kisii

23. Turkana 46. Nyamira

47. Nairobi City


Map of Kenya and its counties:

apsea policy paper on devolution

Documents