Salary delays as counties face cash crunch

Business
By Standard Team | Dec 11, 2023
Preparations at The National Treasury ahead of Budget reading, June 15, 2023. [Elvis Ogina, Standard]

A severe cash crunch has hit counties resulting in interruption of essential services and salary delays.

Governors have attributed the financial crisis to the failure of the Exchequer to release funds to counties on time.

In some counties, workers have already been informed to brace for tough times ahead while others are exploring ways to keep their operations running.

Some county officials claimed they have opted to spend their own source revenue to fund crucial operations even as they appealed to the National Treasury to release funds.

According to the Council of Governors Finance Chairperson and Kakamega Governor Fernandes Barasa, the National Treasury owes counties about Sh52.40 billion.

He noted that they have not received Sh19.64 billion owed to 27 counties for October 2023 allocations and another Sh32.76 billion owed to 47 counties for November 2023 allocations.

"Counties are not able to pay salaries as we enter into the festive season in addition to other budget implementation challenges, which has affected service delivery," he said.

Barasa also blamed the Senate for being a hindrance to devolution after the latter reduced the sharable revenue to counties from Sh407 billion to Sh385 billion in the current financial year.

El Nino rains

This is happening as some of the counties are also still battling the effects of El Nino rains that have left a trail of destruction.

In Nyanza, essential services in health have been affected following the delays to disburse funds to counties.

In Migori, Governor Ochilo Ayacko’s administration says they are lacking pharmaceutical and non-pharmaceutical items as a result of delays in the disbursement of funds.

County Secretary Oscar Olima said they have been struggling to equip hospitals with vital drugs.

Council of Governors Finance Chairperson and Kakamega Governor Fernandes Barasa. [Nathan Ochunge, Standard]

“We do not run a credit line with our suppliers and hence we need to pay for those services,” Dr Olima said.

Governor Ayacko’s administration is also facing challenge of paying salaries.

In Homa Bay, county government workers have been told to be patient over delays in payment of their November salaries.

In an internal memo to workers, County Secretary Bernard Muok informed the workers that they would not be paid on time.

Prof Muok attributed the problem of salary payment to the delay by the National Treasury to disburse funds to the county government.

"We kindly ask for your patience and understanding and assure you that the salaries will be paid as soon as possible," the memo read in part.

In the Mount Kenya region, counties admitted they are struggling to meet their day-to-day operations due to the delayed disbursement of funds from the Exchequer. 

In Murang'a County, operations have been affected owing to the delay, forcing Governor Irungu Kang'ata's administration to spend its source revenue allocation. 

A source within the county government revealed that they received the last allocation in September.
  
Last week, Kang'ata admitted to the challenges in the remittances of resources saying something should be done.
 
"In Murang'a, we have automated the services to ensure the little we get is plowed back to perfect service delivery," said the Governor.
 
Nyeri County government, like many others, received its last allocation in September.

County CEC for Finance and Economic Planning Robert Thuo said they last received about  Sh551.2 million in September 2023.

“This delay has caused inadequate salaries payment, lack of operation and maintenance budget... Crucial services like utility bills in hospitals have been disconnected as well,” Thuo said.

Treasury CS Njuguna Ndungu before the National Assembly Finance and Planning Committee, November 7, 2023. [Elvis Ogina, Standard]

South Rift counties have managed to maintain stability despite months of delays in National Treasury allocations.

However, they are struggling to meet their financial obligations to offset salary arrears and pending bills.

In Kericho County, Chief Officer of Finance Gilbert Bii disclosed that despite the county awaiting its allocation from the National Treasury, robust contingency measures have successfully sustained its financial stability.

Bii emphasised that the County Revenue Fund (CRF) account played a pivotal role in ensuring uninterrupted programme implementation.

"We had some money in the CRF account, and that is what we have been using to run our programmes," he said.

In Narok County, a senior official who did not wish to be named said they have sufficient resources to carry out their responsibilities, revealing that they had some money in their CRF account they have been using.

In Nakuru County, although an official maintained that the county was still operating with National Treasury allocation, workers have complained of delayed salaries.

The situation in Baringo, Samburu, and Bomet counties appeared to be dire with the devolved units struggling to fund crucial operations but officials were reluctant to comment.

[Reports by Anne Atieno, James Omoro, Nikko Tanui, John Tiapukel, Daniel Chege, Purity Mwangi, Nathan Ochunge and Boniface Gikandi]

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