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Governors struggle to keep regions afloat amid cash woes

By Standard Team | Published Mon, November 20th 2017 at 00:00, Updated November 20th 2017 at 12:01 GMT +3

County governments have been reduced to begging for money from Treasury after the national government stopped disbursing funds meant for development and salaries.

While the county governments have issued threats of legal action, Treasury has refused to budge, causing the counties to continue tightening their belts.

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“This matter should not be prolonged unnecessarily as to do so will invite legal measures by both the council and any of the aggrieved county governments,” Council of Governors Chairman Josphat Nanok warned at the beginning of this month.

In a leaked communication between Accountant General Bernard Ndung’u and county finance executives, the Government appears to brush off fears that the counties cannot even pay salaries.

Mr Ndung’u tells the counties seeking money to pay October salaries that they would be “very lucky” as “some have not paid as far back as July and September”.

A source at Treasury also disclosed that the Government had provided a life support facility for counties to meet their pressing needs, which would then be deducted from their disbursements. Already, close to two dozen counties have applied for and received the soft loan.

Contacted for comment, Ndung’u said Treasury had released some funds, although he refused to comment on the leaked messages.

Releasing money

“If you think we are treating the matter casually then that is your own conclusion. But we have started releasing some money,” he told The Standard by phone.

According to the communication with counties, Treasury released Sh4.7 billion on November 9 and an additional Sh5.3 billion on November 13.

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Of the 18 counties, Nairobi received the most at Sh1.2 billion followed by Kilifi (Sh895 million), Mombasa (Sh768 million), Mandera (Sh681 million), Nakuru (Sh675 million) and Narok (Sh619 million).

Others that received cash were Migori (Sh581 million), Kitui (Sh507 million), Bomet (Sh499 million), Kisumu (Sh484 million), Marsabit (Sh460 million), Vihiga (Sh396 million) and Kirinyaga (Sh396 million).

Embu received Sh396 million, Nyeri Sh375 million, Taita Taveta Sh370 million, Samburu Sh361 million and Baringo Sh348 million.

But the counties feel that the money falls short of what they need to fund their recurrent and development expenditure. Nandi County, for instance, has received funds for recurrent expenditure only.

“The county has not received any development funds, so all development projects have ground to a halt. We cannot work without funds,” said Governor Stephen arap Sang,

The county is depending on tea cess and road maintenance levy.

Reports indicate that 10 out of 16 counties did not receive money last month and were still left out of the current list.

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Those left out include Garissa, Kisii, Nyamira, Kitui, Machakos, Makueni, Meru, Tana River, Uasin Gishu and West Pokot.

Mr Ndung’u declined to give details on the disbursements.

“If you wish to obtain official information, there are formalities to follow; you have to approach the Principal Secretary for Treasury. We do not give information over the phone,” he said.

Principal Secretary Kamau Thugge said the delay was caused by a legal conundrum after the schedule of disbursement differed with the County Revenue Allocation Act.

He however said Treasury had released Sh46 billion so far depending on the balances counties were keeping at the Central Bank of Kenya (CBK).

Critical operations

“Part of the reason we had a difficulty is that the law does not allow it, but we realised that people must be paid and critical operations and maintenance must be kept. So we looked at their balances at CBK and advanced funds to them,” said Dr Thugge.

He said Senate had passed an amended law to conform to the earlier schedule but the counties would have to wait until it was cleared by the National Assembly before assent by the President.

“Once approved by the National Assembly, and if there is nothing out of the ordinary, then it is sent to the President who assents to it and Senate approves the consistent disbursement schedule, then we will disburse full amounts,” explained the PS.

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The source confirmed that officials in Government were also apprehensive that if money was released to the counties, it would fund Opposition activities including people’s assemblies, which the Opposition wants to organise across the country.

The Standard has learned that some counties have been forced to borrow from banks to sustain operations, exposing them to high interest rates charged on overdrafts.

Trans Nzoia Deputy Governor Stanley Tarus told The Standard that due to lack of funding, the county government had secured an overdraft to pay salaries, which has since been halted, setting the county up for a crisis.

“Most of our activities have been grounded due to lack of funds. We borrowed money from the bank to pay workers for July. The bank has refused to give us another overdraft to settle salary arrears,” he said.

Thugge however said all counties should be able to pay their workers from the money that has been issued so far.

“If salaries were missing since July then they would be out on the streets striking,” he said.

[Otiato Guguyu, Silah Soskei, Bakari Ang’ela, Osinde Obare and Rael Jelimo]

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