Counties in crisis as Sh60b allocation delays

A major crisis is looming in the counties following failure by Treasury to release Sh66 billion to governors.

The money is part of a Sh300 billion allocation to the counties this year to finance development and recurrent expenditure. Annual allocation to the counties is disbursed in three phases.

Development projects in the counties have stalled and workers have not been paid salaries following Senate’s failure to pass a motion to disburse the money.

There isn’t a single cent that has been disbursed this financial year, 2016/17, more than two months since the budget was read and approved by the National Assembly.

Of the Sh300 billion, which includes Sh280.3 billion equitable share and Sh18 billion conditional allocation, the counties are expected to receive Sh66 billion for the first quarter, which falls in June, July and August.

SEVEN DAYS

Even if the motion to disburse funds is passed, the earliest Treasury can release funds is seven days after the passage, implying that there is no possibility that counties will receive funds before mid this month.

Further, the counties receive less or more depending on how much Treasury has collected, making it uncertain just how much of the expected Sh66 billion the Treasury will release.

And the Commission on Revenue Allocation (CRA) wants Treasury to release the money to the counties to avoid further delay.

“Development activities are not taking place and the situation is not very good. We propose that Treasury seeks ways to resolve this matter as both the Senate and Treasury await for the passage of the motion on the disbursement schedule on allocation of funds to the counties,” said CRA Chairman Micah Cheserem.

He said Treasury is expected to release part of the Sh300 billion, which is disbursed quarterly.

“Treasury should look for funds, at least the amount for the 1st quarter (Sh66 billion), to advance to counties as it will cost the governors a lot more waiting for disbursement,” he said.

Council of Governors wants a law put in place that allows the disbursements of funds automatically as soon as the budget is read.

Kakamega Governor Wycliffe Oparanya, who chairs the Council of Governors (CoG) Finance Committee, said they will meet next Monday to draw up a number of proposals on how to avoid the current scenario.

“It is more than two months now and activities in the counties have come to a halt,” Mr Oparanya said.

He added: “We are proposing that a law be put in place to ensure funds are released automatically by June 30 of every year irrespective of whether such a motion is passed on time or not.”

Oparanya said he suspected the conflict between the governors and senators could be playing out as senators take advantage of their parliamentary role to delay the passage of the motion to disburse funds.

FREE MATERNITY

“As soon as the CRA allocates funds and the County Allocation of Revenue Act (Cara) is in place, the Intergovernmental Budget and Economic Council should be tasked with the responsibility of ensuring the schedule for disbursement is ready,” he said.

This, he said, will avoid a situation where the counties have to await a Senate motion over the same.

Nairobi County officials said service provision to residents continued to be affected by the delay in releasing the money.

In the first quarter of the financial year, Nairobi County was set to receive Sh3.6 billion to go towards service provision and development.

The amount is to finance county expenditure like free maternal health, leasing of medical equipment, Level 5 hospitals, road repairs and payment of contractors.

Deputy Governor Jonathan Mueke said: “If you want the contractors to be paid, let the national government add the county money because what we receive is not enough to cater for service delivery and management of county affairs.”

The Kenya Medical Supplies Authority is owed Sh150 million by the county government and this has led to the suppliers pulling out.

Oparanya said the delay had greatly affected operations, with health, education bursaries, county public service and procurement being the most affected.

“We are not doing anything on the ground. We cannot buy drugs or pay for operations in our hospitals, and we are worried that our employees might down tools due to the delay to pay their salaries,” Oparanya said.

Several counties are yet to pay workers, a move that could trigger strikes especially in the health sector. As a result of the delay, a war of words has erupted as to who among the senators are to blame for the crisis.