Operations in most counties have been paralysed after the National Treasury failed to disburse funds for four months.
The Council of Governors (CoG) is protesting against what it terms continued denial of the much-needed cash even after the Senate cleared a disbursal schedule.
The formula approved by Senate indicates the 47 counties are entitled to Sh330 billion, but only Sh7.6 billion was sent to 19 counties in August.
Most counties have been borrowing from commercial banks to pay salaries, with the CoG warning that this is no longer sustainable.
“The continued delay and breach of the law has led to untold suffering for citizens and led to interrupted delivery of services and stalling of development projects," said CoG chairman Josphat Nanok in a letter to Treasury Cabinet Secretary Henry Rotich dated October 10.
"Counties continue to incur costs when they borrow from the commercial banks to pay salaries," he added. “The purpose of this letter is, therefore, to inform you that legally the National Treasury is under obligation to release all the monies accrued for the past four months to the county governments..."
The letter is copied to Head of Public Service Joseph Kinyua, Clerk of the Senate Jeremiah Nyegenye and all county finance executives.
Yesterday, the Senate said it had written to Mr Rotich indicating it had passed the Cash Disbursement Schedule without amendment and in the form which it was forwarded from Treasury.
“We therefore advised Treasury to disburse the funds as per schedule and further recommend that Treasury forwards proposed amendments to the County Allocation of Revenue Act 2017 and the disbursement schedule to address its concerns," read Mr Nyegenye’s letter to Nanok dated October 10.
"We have not received any further correspondence from Treasury on this matter and therefore trust that Treasury will proceed as advised."
So far, the only counties that have received partial disbursement are Bomet (Sh376.8 million), Busia (Sh408 million), Embu (308.6 million), Homa Bay (456.6 million), Isiolo (Sh264.2 million), Kericho (Sh365.7 million), Kiambu (Sh705.3 million) and Kirinyaga (Sh308.6 million).
Others are Laikipia (Sh315 million), Machakos (Sh544.8 million), Nairobi (Sh914 million), Narok 456.6 million), Nyandarua (Sh334 million), Samburu (Sh266.4 million), Taita Taveta (Sh272.7 million), Tharaka Nithi (Sh257.9 million), Uasin Gishu (Sh399.5 million), Vihiga (Sh308.6 million) and West Pokot (Sh331.9 million).
Senate approved the disbursement mid-last month and according to the schedule, more than Sh330 billion is to be given to the counties by June 2018.
“This is to bring to your attention that on Thursday, September 14, 2017, the Senate considered and approved the Cash Disbursement Schedule in order to enable operationalisation of monthly transfer of funds from the Consolidated Fund account to the Respective County Revenue Accounts,” Nyegenye wrote to Principal Secretary Kamau Thugge on September 17, copied to Rotich and Kinyua.
Nyegenye’s letter was in response to the PS’s circular dated July 20, 2017, that informed the Senate that Treasury, in consultation with the budget committee of the Intergovernmental Budget and Economic Council (IBEC), had finalised cash disbursements for the financial year 2017-2018.
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“The purpose of this letter is to forward to you the 2017-2018 County Government’s Cash Disbursement Schedule, for consideration and approval,” read Dr Thugge’s letter.