Governors have withdrawn a threat to shut down counties after the National Treasury released some of the funds due to the devolved units and the two sides reached an agreement on the settlement of the balance
Treasury averted the shutdown of the county governments by releasing Sh31 billion that was owed to the 47 devolved units for February.
The Council of Governors (CoG) yesterday, in a press address that was also attended by Treasury Cabinet Secretary Njuguna Ndung’u and Principal Secretary Chris Kiptoo, said the two sides had reached an agreement on the formula to settle the remaining monies until the end of the current financial year.
CoG had on April 24 issued a 14-day ultimatum to shut down counties to protest the Treasury’s delays in the disbursement of funds.
“Since the Council’s notice on this matter, issued on April 24, 2023, the National Treasury has so far disbursed February 2023 allocations amounting to Sh31.45 billion to the 47 Counties. Currently, the outstanding monies owed are Sh29.6 billion for March 2023 allocation,” said CoG Chairperson Anne Waiguru.
Ms Waiguru, who is also the Kirinyaga governor, said that the council and Treasury agreed that the latter would be prompt in making disbursements to counties moving forward.
“Additionally, it has been resolved that the March allocations be disbursed by May 15, 2023, and April allocations by the end of May. The disbursements for May and June are to be issued by the first two weeks of June to allow counties to absorb these resources within the financial year,” Ms Waiguru said.
Treasury is currently two months behind on disbursements since it is supposed to release the funds by the 15th of every month to enable counties to utilize the funds as planned.
Delayed disbursement of funds to counties has been associated with poor absorption. The counties have also ended up spending excessive amounts on recurrent activities and raising unbudgeted costs, including costs as a result of pending bills and interests paid to banks for overdrafts.
The delays also affect the timely implementation of development projects and have caused disruptions to services such as healthcare when medical workers down their tools to demand salaries.
“We have also agreed to explore short-term measures aimed at cushioning counties to ensure continuity in service delivery as well as prevent industrial unrest,” Ms Waiguru said.
She, however, did not give details on whether the statement meant that counties now have the green light to rely on overdrafts to run operations, which would mean more costs.
The governors also said they have started engaging the Controller of Budget (CoB) for interventions to reduce the period between when monies hit county accounts and when they can access them.
“We are also engaging the office of CoB to see how to reduce the timeline between when monies hit our revenue funds accounts and when they are available for use to pay for the operations in the counties,” Wajir Governor Ahmed Abdullahi said.
