Hillary Mageka @hillarymageka

Controller of Budget Margaret Nyakang’o has waded into the controversy surrounding delayed release of the Sh78 billion to counties even as governors yesterday warned services could soon ground to a halt if the Treasury holds onto the funds.

In an interview with People Daily on Tuesday, Nyakang’o said counties have only received funds meant for two months since the beginning of the 2020-2021 financial year. 

She stated that to-date, the devolved units have only received the July and August allocation as provided for in the Division of Revenue Act, County allocation Revenue Act and stipulated for disbursement in the Cash Disbursement Schedule.

“Even so, the funds were released in September – nearly three months into the 2020-21 financial year – owing to the prolonged delay in passing enabling laws occasioned by the standoff in the passage of the third basis for sharing revenue among counties by the senate,” Nyakang’o observed.

Equitable share

“It is actually true that they have not received the equitable share for September, October and November now,” she added, putting the blame squarely on Treasury.

In a letter dated November 2, 2020, the Council of Governors (CoG) had warned continued delayed disbursement had brought counties to their knees and will negatively affect budget implementation.

“You are aware that this affects clearance of pending bills and leads to a rise in industrial action due to late payment of salaries,” CoG Chairman Kakamega Governor Wycliffe Oparanya told CS Yatani in the letter.

Nyakang’o maintained her office only authorises the release of what has been put in the county revenue fund.

“They know who has not given them the money. It is definitely not CoB. Why would I sit on the money if it is in the accounts?” Nyakang’o posed.

“The Treasury has to transfer the money to the operations account before requisitions are made to my office to authorise the release of the funds,” she held.

Last month, after President Uhuru Kenyatta signed the County Allocation of Revenue Bill, 2020 it was expected the devolved units were to immediately start receiving their Sh369.87 billion contained in the equitable share and conditional grants for financial year 2020/21.

Of the amount, Sh316.5 billion is Equitable Share and Sh13.73 billion conditional grants by the national government.

According to the County Allocation of Revenue Act (Cara), the counties were to receive Sh79.126 billion that was due to them in the first three months July (Sh25.32 billion), August (Sh26.903 billion) and September (Sh26.903 billion) but there was a delay as a result of the stalemate at the Senate regarding the criterion for revenue allocation among counties. 

The lack of funds forced the  governors to suspend all non-essential services paralysing services in the regions.

Counties usually receive their equitable share on the 15th day of the month, but the Senate amended the County Allocation of Revenue Bill, so the gubernatorial units could  access what was due to them during the First Quarter of the year in lump sum.

This meant, on the October 15, counties’ accounts should have been credited with another Sh25.32 billion.