EACC warns counties of 11 loopholes in revenue management
The Ethics and Anti-Corruption Commission (EACC) has noted at least 11 loopholes through which counties are losing or misusing revenues.
This follows Corruption Risk Assessments (CRAs) undertaken by EACC in 26 county governments, depicting poor revenue administration across the counties which compromises their full potential for revenue collection and utilisation.
In a circular to all governments, EACC has directed the county bosses to take system reform measures to address the threats.
"In the exercise of its preventive mandate, the commission has carried out corruption risk assessments at various county governments and has identified the generic loopholes in revenue management," EACC CEO Twalib Mbarak said in the circular.
Loopholes identified by EACC
According to Mbarak, most counties have failed to legislate on revenue administration and revenue streams. The counties also have arying fees and charges levied for various services without the backing of an act of parliament or county legislation as required by law.
EACC also found that most counties have not yet developed and created databases of traders and businesses operating within the counties to guide in revenue collection.
"Valuation rolls in most counties have either not been developed or are outdated contrary to the Valuation for Rating Act, Cap 266," Mbarak added.
According to the anti-corruption watchdog, revenue collection in some counties is done by unauthorized staff and casual workers. Also, revenue collectors especially those in the open area such as markets and car parks are not easily identifiable since they do not put on official uniforms or name tags.
Another loophole identified by EACC is the use of manual systems for revenue collection which leads to revenue leakage, non-receipting, issuance of unofficial revenue receipts and theft.
Sometimes, the counties do receipting and confirmation of revenue on the basis of banking slips without confirming the credit in the county bank account/bank statements.
EACC also noted unwarranted delays in banking of revenues as well as failure to prepare revenue reconciliation reports of daily revenue collections and bankings.
The counties were also faulted for spending of revenue at source.
"The Commission hereby cautions and advises you to develop and operationalize systems and procedures to streamline integrity and transparency in revenue management. This is to be done in line with the relevant provisions of the Constitution; Public Finance Management Act, 2012; and the Public Finance Management (County Governments) Regulations, 2015," Mbarak said.
