County governments have warned they could grind to a halt if National Treasury fails to address delays in disbursements.
Council of Governors (COG) chairperson and Kirinyaga Governor Anne Waiguru has asked the National Treasury to release all the monies owed to the devolved units.
Ms Waiguru said counties are owed an accumulated amount of Sh125.8 billion in arrears for the months of January, February, March, and April.
Addressing the press during a meeting that brought together national and county government leaders from Central Kenya, Waiguru said the delays have adversely affected operations at the counties.
“Delayed disbursement of funds has been a major threat to the functionality of the devolved units since 2013 and continues to put a strain on their operations,” said Governor Waiguru.
The COG boss said the National Treasury has perennially delayed in disbursing monies to counties.
"The lack of funds was causing counties to delay employees’ salaries and remittance of statutory deductions, issuance of agency notices by the Kenya Revenue Authority (KRA) and or attaching county governments bank accounts without consideration of the status of disbursement," said Waiguru.
KRA also imposes penalties due to late payment of taxes occasioned by the delays further constraining county resources according to Waiguru.
"Counties are also incurring huge interests due to bank overdrafts from commercial banks used to fill the fiscal gaps because of the delays," said the governor.
Waiguru said delayed settlement of money owed to suppliers and contractors had led to further accumulation of pending bills which expose counties to litigation.
“The delays are derailing development projects, which leads to under absorption of budgets, it also hampers counties' response measures towards emergencies such as floods, and drought,” said Waiguru.