Governors have won the fight for funds allocation after the Supreme Court ruled that the Executive cannot be allowed to spend before the two levels of government agree on division of revenue.
The Supreme Court ruled that the National Assembly cannot enact the Appropriation Bill which allows the national government to incur expenditure before the enactment of the Division of Revenue Bill which allows county governments to withdraw funds.
The decision means that in any financial year, Parliament must first agree and pass legislation on the amount of money to be shared to the 47 counties before passing the budgetary allocation for the national government.
“Estimates of revenue and expenditure must logically be based on equitable share of revenue due to the national government as provided for in the Division of Revenue Bill. Any decision by Parliament to pass the national government budget first will be unconstitutional,” ruled the judges.
Huge blow
The apex court, however, dealt a huge blow to the Commission on Revenue Allocation (CRA), ruling that their recommendations on the formula of sharing revenue between the two levels of government are not binding to both the National Assembly and the Senate.
The judges ruled that although CRA has a central role to play in ensuring equitable share of revenue, their recommendations are only to be accorded serious consideration by the two Houses while debating on the Division of Revenue Bill.
On the supremacy wars between the National Assembly and Senate, the judges ruled that they should embrace mediation whenever they fail to agree on the Division of Revenue Bill, which has always triggered impasse on budget allocations.
The judges, however, warned that should Parliament fail to agree in future over the division of revenue, any person will be at liberty to petition the High Court to order for its dissolution for violating the Constitution.
To cushion counties during mediation between the two Houses, the Supreme Court ruled that the National Assembly will be required to authorise disbursement of funds from the Consolidated Fund to forestall grinding of operations within the counties.
“The monies so withdrawn shall be included under separate vote for the several services in respect of which they were withdrawn,” they ruled.
The judges also declared that the Supreme Court or any other court is not the appropriate forum for setting timelines as to when the National Treasury must transfer the equitable share of revenue to counties.
The judges
The decision was given by Chief Justice David Maraga, justices Mohammed Ibrahim, Smokin Wanjala, Njoki Ndungu and Isaac Lenaola.
The case was filed by the Council of Governors on behalf of the 47 counties seeking the top court’s advisory opinion on how counties should share revenue from the national government and resolve the perennial conflict between Senate and National Assembly over Division of Revenue.
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