at the other level and respect the constitutional status and institutions of government at the other level’ (GoK, 2010: Article 189 (1a)). These constitutional provisions not only grant enormous political power to county governments but also buffer them from attempts of power usurpation by the national government. As can be seen in Figure 1, the provision for respect of functional and institutional integrity is at the centre of conflict and competition for control over spending decisions among actors from different levels of government. Other than the constitutional bodies (Salaries and Remuneration Commission, Commission for Revenue Allocation and the Controller of Budget) all the other actors in Figure 1 have, in the past, engaged in a conflict where they accuse one another of misusing public resources or attempting to usurp another actor’s powers. These actors have also accused one another of fiscal indiscipline. Fiscal indiscipline in an intergovernmental setting usually occurs when spending under a devolved system exceeds revenue raising responsibilities, thus putting a strain on local budgets. Financially, the constitution allocates a block grant of no less than 15 per cent of the total annual national revenue to be shared equitably among the 47 county governments (GoK, 2010: Article 203 (2–3)). Going by Fiscal Year 2013/14, which recorded an adopted budget of KSh 1.45 trillion, counties received a total of KSh 224 billion (US$2.48 billion; CoB, 2014) – considerably less than 15 per cent. While this percentage is on average higher than in most African countries, this allocation is often contested by actors of the national and county governments, with the former putting it at more than 43 per cent of the constitutional limit and the latter putting it at less than 15 per cent.1 Unfunded mandates Fiscal relations between the two levels of government have recently been shaped by unfunded mandates from the national government to county governments. Unfunded mandates in this case arise out of functions that have been devolved to county governments but whose funds still remain with the national government. Figure 2 F i s c a l r e l a t i o n s i n K e n y a ’s d e v o l v e d s y s t em o f g o v e r n a n c e presents a summary of unfunded mandates in Kenya two years after devolution. Whereas the constitution safeguards counties against unfunded mandates (GoK, 2010: Article 187 (2a)), the continued retention by the national government of more than KSh 102.6 billion (US$.1.14 billion) meant for functions that have already been devolved has created mistrust between the Council of Governors and leaders of the national government. Independent actors in Kenya’s fiscal environment, such as the Commission for Revenue Allocation (CRA), have supported the call to have ‘money held by the central government in various sectors, such as health, agriculture, roads and transport, be devolved to counties’ (CRA, no date). In a country like Kenya, capital projects in roads, health, electricity, agriculture and water endear elected officials to voters; as such, being in charge of these projects enables different actors from different levels of government to protect, project and entrench their powers with the electorate. This is commonly referred to as ‘pork barrel’ in other settings. The other constitutionally provided fund that is a source of conflict and competition between the national and county governments in Kenya is the national Equalisation Fund, which constitutes one half of all the total annual revenues based on the last audited accounts. The constitution allocates financial responsibility on the distribution and use of this fund to the national government to provide earmarked services such as water, roads, health facilities and electricity to marginalised areas. The criterion for identifying marginalised areas by the national government has been perceived by governors as arbitrary and opaque in the last two years and has prompted the Council of Governors to call for a constitutional amendment to make the equalisation fund a county government fund administered by the CRA (a constitutionally independent body) on the basis of a ‘scientific framework’ (GoK, 2010: Article 204 (1–2)). An important point to note in the tussle over who should be in charge of the equalisation fund is that the very functions for which the fund was created are the same ones devolved to county Commonwealth Governance Handbook 2014/15 59 Figure 1: Interactions Conflict Resources Independent commissions Governors Devolved resources Senators MPs MCAs
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