Senators and Members of the National Assembly have hit a deadlock over a law that seeks to pave way for the release of Sh39 billion grants for counties.
Senators have strongly opposed an amendment introduced by the National Assembly, seeking to essentially take away the Senate’s oversight role on how the devolved units spend grants from development partners.
The contentious clause has also triggered a split between the Council of Governors (CoG) and the National Treasury after the latter declared support for the National Assembly’s position.
Yesterday, a sitting by the 10-member mediation committee to discuss the implementation of the County Governments Grants Bill, 2021 failed to reach a consensus on the contested clause.
The standoff implies that counties will have to wait longer before benefiting from the billions.
The meeting was attended by Treasury Cabinet Secretary Ukur Yattani and Controller of Budget Margaret Nyakang'o.
The Bill seeks a legal framework for the disbursement of conditional grants from the national government and donors to county governments.
The National Assembly amended clause 3 of the Bill to make it a perpetual law going against the Senate position that seeks to make it an annual Bill.
Mr Yattani yesterday told the mediation team that the Treasury is in support of the National Assembly’s position in making the Bill a perpetual law.
The implication of the amendments is that the grants will be included in the Budget Policy Statement (BPS) that is considered by the Nationally Assembly, which in effect will take away the Senate oversight role on the expenditure of the billions.
CoG Finance and Budget Committee chairperson and Laikipia Governor Ndiritu Muriithi expressed his opposition to a perpetual law.
He argues it will be difficult to process grants provided in the middle of a budget cycle while giving example of desert locust emergency funds that took nine months to be disbursed.
“The only good thing with perpetual is that the numbers change. It is difficult to have one schedule. We always get new monies in the middle of the budget cycle. How will we introduce the schedule?" posed Murithi.
Murithi told the committee to consider the Senate position of an annual Bill to unlock the current grants while giving room for further talks.
"We can pass it as an annual Bill for now and if the perpetual one is agreed on later, we can move on. We need to unlock the current grants," he added.
But Yattani said his decision to back a perpetual law was informed by the perennial delay in releasing the grants which has essentially affected service delivery.
“Every year, we are having challenges occasioning delays. The delays have ended up affecting service delivery. This financial year we have not disbursed any conditional grants and our partners are very concerned because they also have their own timelines,” said Yattani.
Further, the National Assembly proposes that the National Treasury facilitates any agreement between the county governments and development partners.
But Yattani said Treasury’s role is limited to signing of financing agreements between the government and development partners/financiers.
“In view of the above, the responsibility of resolving disagreements should be assigned to the respective ministry, department and agencies responsible for the condition and to whom the grants are appropriate,” said Yattani.
“This is because MDAs are in charge of the candidate functions for the grants and are better placed to give policy directions and conditions for access to the grants by county governments,” he added.