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Kenya's National Treasury CS Yatani contradicts governors on arrears

By Fredrick Obura | January 14th 2021 at 13:24:22 GMT +0300

National Treasury CS Ukur Yatani (PHOTO: File)

NAIROBI, KENYA: National Treasury on Thursday said it has not disbursed funds to the counties for two months contradicting the Council of Governors.

Governors through Kakamega County boss Wycliffe Oparanya said the arrears spread out to four months of October, November, and December of last year and January this year.

In a statement, Treasury called on the county governments to utilise Sh34.6billion balance lying at the Central Bank of Kenya as it works on a plan to clear the two months arrears.

Cabinet Secretary Ukur Yatani of the National Treasury and Planning confirmed that it has so far transferred Sh133 billion to county governments for the Financial Year 2020/21. Of the transfers, Sh120.2 billion has been disbursed as part of the equitable share and Sh13 billion as conditional grants.

“However due to the adverse effects of Covid-19 and the subsequent containment measures that have generally slowed down the pace of economic activities, the disbursements to county governments are falling behind by two months,” he said.

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On Wednesday, Council of Governors Chairman Wycliffe Oparanya claimed that counties have not received funds for four months crippling down operations at the devolved units.

He said the county governments have not received disbursements of equitable share for October, November, December of last year, and January this year.

“Some of the counties have not received the September disbursement bringing the total balance to Sh94.7 billion,” he said adding that the delay has hindered service delivery especially during the wake of the Covid-19 pandemic when the county governments are expected to be at the frontline in offering health services.“County government civil servants have not been paid all their salaries for three months."

He threatened legal action if the delay persists. Article 219 of the Constitution as read together with section 17(6) of the Public Finance Management Act provides for the timely disbursement of the equitable share of the revenue.

Meanwhile the office of the Controller of Budget (CoB) has raised alarm over the low implementation of development projects across the 47 counties.

According to a report by CoB's county government implementation review report for the first quarter of the 2020/21 financial year, devolved units spent Sh2.3 billion on development projects, representing an absorption rate of 1.4 per cent of cumulative annual development budget of Sh159.33 billion.

Slight improvement

This represents a slight improvement from 1.1 per cent attained in a similar period during the 2019/20 financial year when the total development expenditure was Sh1.94 billion out of a total annual development budget of Sh177.3 billion.

Controller of Budget Margaret Nyakang’o, however, says that despite the slight increase, the overall absorption rate of development projects was relatively low.

“County governments should put measures in place to ensure that expenditure on development activities meets the minimum set ceiling of 30 per cent of their annual budgets in line with the Public Finance Management (PFM) Act, 2012,” she said.

Wycliffe Oparanya Ukur Yatani
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