Treasury now says a deal between the county government and a private firm to manage Sh443 million community health services can only be rolled out if approved by the Attorney General.
Although Treasury said some of its concerns had been largely addressed, the agreement between Isiolo county and Living Goods Ltd needs "further fine tuning" to be in line with the law.
In a letter dated 16 April, 2019 to Governor Mohamed Kuti, Treasury CS Henry Rotich said his office had analysed a draft document between the NGO and the county and made some observations.
By providing for joint ownership of the project between the county government and Living Goods, Rotich said the agreement flouted the law that requires counties to fully own public projects they engage in, even when these projects are performed jointly with third parties.
“The agreement should make it clear that any programme implemented by the County Government of Isiolo and Living Goods is owned 100 per cent by the county and not jointly. We therefore propose the words ‘engage in a joint project’ are replaced with ‘engage jointly in a project’,” Rotich says.
Treasury also took issue with the provision of the agreement that the county government and Living Goods would establish a Special Purpose Fund and Account saying such funds and accounts can only be established with the approval of Treasury.
“The Regulations and the Agreement be forwarded to the office to the Attorney General for legal opinion. Further, in finalisation and implementation, the county government should ensure compliance with the external resources policy, Public Finance Management Act (PFMA) and PFMA (County Government) Regulations and any other relevant law,” Rotich said.
Rotich also criticised the provision in the agreement which gave Living Goods project oversight powers alongside the county insisting that since this is a county government project, the Project Oversight Committee should only report to the Governor and not to Living Goods.
Treasury also faulted the provision in the agreement which empowers Living Goods to charge project management fees saying such fees, can only be charged by the county government which is legally empowered to tax and charge.
Treasury indicated that assets acquired during the project must be registered as county property.
In a letter dated 18 January, 2019 Rotich cautioned Kuti against implementing the controversial deal, which is already being probed by Senate.
Some residents, through Isiolo Senator Fatuma Dullo, had presented a petition to Senate opposing the agreement which will see the firm also take charge of three sub-county hospitals for four years.
Ms Dullo, on behalf of the petitioners, had told her colleagues in October last year that the county administration flouted the law when it negotiated the deal; there was no public participation.
She explained that the county ought to have consulted the Ministry of Health before putting pen to paper, considering that the national government is mandated with policy development in the docket. “The county government should have consulted stakeholders.”