Operations in 35 of the 47 counties could grind to a halt after the National Treasury defied a parliamentary committee and made good its threat to withhold disbursement of county allocations for their failure to clear pending bills as of the end of last month as directed by President Uhuru Kenyatta.
As the pending bills stand-off persisted, Council of Governors (CoG) chair and Kakamega Governor Wycliffe Oparanya yesterday raised the alarm over delayed disbursement of Sh31.6 billion for the month of November to the counties.
He warned that unless the money, which was due by November 15, is released immediately, counties will not be able to pay workers salaries and operate, a situation that will create a crisis in service delivery in the devolved units.
“Withholding development funds by the National Treasury creates a crisis in service delivery by the county governments as development is pegged on available resources. County governments have progressively made deliberate efforts to settle pending bills which include those inherited from the local authorities,” said the CoG boss in a statement.
Affect growth
He added: “We, therefore, call upon the National Treasury to expeditiously disburse all the pending allocations that are long overdue to the county governments to allow for seamless service delivery and payment of the said pending bills.”
Last month, the National Assembly’s Budget and Appropriations Committee rejected a request by Treasury Acting Cabinet Secretary Ukur Yatani to deny at least 15 counties their equitable share of allocation for failing to clear their pending bills.
The CS’s request for the stoppage of the disbursement of the equitable share of the revenue for the financial year 2019/20 was done through Speaker Justin Muturi who said: “Honourable Members, pursuant to the provisions of section 97(2) of the Public Finance Management Act, 2012, the Acting Cabinet Secretary is seeking approval of the House for stoppage of transfer to fifteen (15) County Governments as contained in Circular No.20/2019 dated 19th November 2019.”
“…the CS has noted that the fifteen (15) County Governments have contravened section 94(1)(a) of the Public Finance Management Act, 2012 by failing to make any efforts at clearing eligible pending bills, thus affecting economic growth and inconveniencing Small and Micro-Enterprises (SMEs) and other business segments at the county level,” he added.
But the Treasury, according to the CoG, has not only continued to withhold the funding, but has gone ahead and listed an additional 20 counties as among those as those that will not receive funding.
“The Council of Governors commends the National Assembly for its stand against withholding disbursements of funds to 15 county governments owing to the issue of pending bills. Additionally, 20 counties have been added to the list…” he said.
Clear bills
Counties which as at October 28 owed suppliers include: Migori (Sh970 million), Tharaka Nithi (Sh921 million), Bomet (Sh893 million), Kirinyaga (Sh1.05 billion), Nandi (Sh1.12 billion), Mombasa (Sh4.07 billion), Kiambu (Sh1.56 billion), Garissa (Sh1.57 billion) and Baringo (Sh35 million).
Others are Narok (Sh1.8 billion), Machakos (Sh1.1 billion), Nairobi (Sh21 billion), Vihiga (Sh1.8 billion), Isiolo (Sh1.09 billion) and Tana River (Sh1.09 billion).
The affected counties had been given up to December 1 to comply with the directive, failure of which their monies would be locked as stipulated in Section 97 of the Public Finance Management Act.
Yatani faulted counties for failing to heed resolutions of the Inter-governmental Budget and Economic Council (IBEC), chaired by Deputy President William Ruto. The IBEC resolved that county governments would pay eligible pending bills on a priority basis as a first charge on the county revenue fund by end of financial year 2019/20.
Counties owed their suppliers Sh64.2 billion as of October 28.
However, MPs in the Budget committee chaired by Kimani Ichung’wa (Kikuyu) turned down the request by Yatani, terming it “untenable as it is not backed by any provisions of the Constitution.”
Instead, the MPs last week said they would ask Treasury to release cash to counties to enable them clear the pending bills within the next 60 days.
But instead, Treasury has declined to release the money, a move Oparanya says negates the spirit and letter of devolution which connotes effective service delivery.
On December 4, nine governors requested the Senate to establish a special committee to audit and verify ineligible pending bills amounting to Sh37.7 billion, which is at the heart of the push and pull between them and Treasury over the disbursement of revenue.
Governors Anne Waiguru (Kirinyaga), Alfred Mutua (Machakos), Mike Sonko (Nairobi), Samuel Tunai (Narok), Muthomi Njuki (Tharaka Nithi), Hillary Barchok (Bomet), Mohammed Kuti (Isiolo), Stephen Sang (Nandi) and Vihiga deputy Governor Patrick Saisi had sought the Senate’s intervention over the stalemate.
