Counties in deep crisis as delayed funds hit Sh122bn

The amount of delayed fund disbursements to counties by the National Treasury has crossed the Sh122 billion mark after falling four months behind schedule,  leaving millions at risk of exclusion from critical services.

Treasury owes the 47 counties a total of Sh122.1 billion following the lapse of the March 15 deadline by which it should have disbursed the March 2023 equitable share of revenues. The last time counties received any funds from Treasury was in November 2022, the Council of Governors (CoG) says.

Counties have now warned that the delay will affect their delivery of health, agricultural, education, and other critical services for residents, including disaster management.

CoG yesterday told the Nation that all 47 counties are owed Sh29.6 billion (December 2022 allocations), Sh31.45 billion (January allocations), Sh31.45 billion (February allocations), and Sh29.6 billion meant for this month.
Treasury was supposed to release this month’s funds by March 15 but no county has received them, signalling a possibly longer wait for the counties, even as the budget year edges towards a close.

“This unwarranted delay has jeopardized the operations of the Counties unable to pay salaries, suppliers and continue to offer essential services to citizens,” CoG Chair Anne Waiguru told Treasury Cabinet Secretary (CS) Njuguna Ndung’u, in a letter on March 9. By then, counties were owed Sh92.5 billion as March funds had not fallen due.

Services interruption

Warning that the continued delays were risking getting counties to “precarious positions not desirable of a government”, Ms Waiguru, the Kirinyaga Governor, asked Treasury to release the funds to prevent interruption of services.

“This will ensure uninterrupted service delivery and implementation of programs and projects as budgeted for in this financial year. Any further delays will leave the counties in precarious positions not desirable of a government,” the CoG Chair said.

Already, several governors have come out to complain that some of the services including payment of salaries, funding healthcare, and handling emergencies are being affected, with others indicating that they have had to enter into overdraft arrangements with banks to keep running.

The counties indicate that delay in the release of the funds has affected the implementation of projects and payment to contractors and suppliers, which could raise the already high pending bills. The pending bills had reached Sh159.9 billion by December last year, according to the Controller of Budget (COB).

Treasury yesterday did not respond to the Nation on the cause for the delay in the release of money to counties and the progress to settle the amount that has stayed on an upward trend.

Delay in disbursement of funds affects counties’ operations, mainly the undertaking of projects as funding becomes a problem.