Kenyan Counties bypass ministries in new payment system

County governments have started receiving donor funds directly for the health sector instead of receiving the cash from line ministries.

The current funding system, bypassing the National Treasury, has only been implemented at Health ministry where funds from Danish International Development Agency (Danida) are now wired directly to county governments.

According to Treasury financials printed in the Kenya Gazzette last week, the counties received Sh422 million from Denmark’s Development Cooperation (Danida) in the first half of this year. Although Treasury books showed that the Government expected the money from the Danish government, the amount was not factored in actual receipts in the national government.

The Council of Governors has been lobbying to be granted a free hand to access the funds to avoid perennial shortages caused by late disbursing of donor funds through line ministries.

Treasury says the 47 counties have already received Sh95.5 billion since the beginning of the financial year against a target of Sh284.7 billion by June 2017.

“The allocation for county governments include equitable allocation of Sh280 billion, allocation of Sh4 billion for level five hospitals and Sh422 million Danida support to county health facilities,” Treasury Cabinet Secretary Henry Rotich said in the notice on Friday.

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Rotich, however, explained that other allocations to county governments will remain as per the County Revenue Allocation Act 2016 and will be disbursed directly by the respective national government entities.

The county governments and the national governments have been on a warpath over delayed disbursement of health funds to the devolved units.

Governors have blamed these delays for the current unrest in the health sector that has seen several lobour strikes by medical practitioners across the counties.

The Kenya Medical Practitioners, Pharmacists and Dentists Union insists that devolving the function to county governments was a mistake amid allegations that the devolved units are guilty of ethnic profiling, job stagnation, salary delays and withholding of allowances and poor working conditions.

The Council of Governors, however, blames delays in disbursements by Health Ministry, through which the money is wired, for the crisis facing the sub-sector. They also accuse the ministry of diverting the cash to service other budgetary needs.

This became apparent during probe into the Afya House scandal where parts of the payments for the portable clinics were diverted from the allocations made to the free maternity kitty.

Council of Governors Chair Peter Munya had recently questioned Sh800 million re-allocation by the Health ministry, cash that was initially meant for county governments’ health sector.

Munya has been on record complaining of unreasonable sharing of resources between the two levels of government, especially in Health where the docket had largely been devolved.