Deputy President Kithure Kindiki has taken the decision to end the dispute between governors and the Controller of Budget (CoB).
He called a meeting to listen to the issues arising from the quarterly reports that county bosses say unfairly profile them.
Acknowledging delays in disbursing funds from the National Treasury, Prof Kindiki said devolved governments also need to uphold financial prudence and transparency in the management of resources.
During the Intergovernmental Budget and Economic Council meeting (IBEC) at his official residence in Karen, Nairobi, yesterday, Prof Kindiki said governors and the Controller of Budget need to work together.
“Appreciating concerns raised by the Council of Governors and the Controller of Budget on the mechanism for approval of withdrawal of funds and multiple accounts held by county governments, and appreciating the perceptions arising from the CoB quarterly reports, the Office of the Deputy President convenes a consultative meeting to bring these issues to resolution in the spirit of collaboration and cooperation,” Prof Kindiki said in a statement.
The Council of Governors has decried delays in approving funds to counties by Controller of Budget Margaret Nyakang’o, saying critical public services like health are being affected.
“We must face that discussion head-on and address the problem. We cannot have a situation in which counties receive money but are unable to spend it,” the DP said.
“We also insist that accountability is for all. I recommend that we bridge the gap between the viewpoint by CoG and the Council of Governors to ensure both institutions deliver on their mandates as they are pursuing legitimate national interests.”
Prof Kindiki told the National Treasury to release Sh32 billion owed to counties on Thursday next week.
“The transfer of functions already agreed upon between the national and county governments be expedited for conclusion and gazettement by today, December 13, 2024. Sectoral engagements be immediately undertaken to bring to resolution other functions pending consensus before the Intergovernmental Relations Technical Committee (IGRTC). The performance assessment for functions already devolved to county governments is to be expedited,” reads the statement by the IGRTC after the meeting.
The two levels of government agreed “to facilitate the documentation, inspection, valuation and transfer of county fixed assets”, with the State Department of Lands guided to speed up valuation for land and buildings inherited by devolved governments.
The meeting agreed that the National Treasury, through Parliament, facilitates the amendment of Section 110 and 191 of the PFM Act 2012 to improve the ease of access of conditional grants by devolved governments.
During the meeting, the Deputy President said the national and devolved governments have agreed on speeding up the transfer of functions.
“Sectoral engagements be immediately undertaken to bring to resolution other functions, pending consensus before the IGRTC. Further, the performance assessment for functions already devolved to county governments be expedited,” the DP said.
Prof Kindiki insisted that the push for seamless disbursements of shareable revenue by governors does not mean a free pass for county governments on accountability.
He emphasised that both governments must adhere to the same rigorous standards in order to win public trust.
The DP also said the national government is committed to disbursing the Equalisation Fund arrears at Sh10 billion every financial year until it is fully settled.
“I am glad to note that the National Treasury has transferred Sh158 billion to county governments, being the amounts for June to October 2024. Given the realities of our fiscal space, I encourage counties to enhance own-source revenues in an effort to support their operations and activities,” he said.
In her latest report, Dr Nyakang’o attributes counties’ failure to implement their budgets to delays by the National Treasury to release funds on time.
“As of September 30, 2023, the National Treasury had disbursed Sh61.11 billion as equitable share for the financial year 2023/24, which translated to 15.9 per cent of the approved equitable share of revenue. The National Treasury is required to ensure disbursements of equitable share of revenue to county governments are in line with the approved disbursement schedule to ensure effective budget implementation,” Dr Nyakang’o says in her report.
