Counties battle a cash crunch on funds hold-up by Treasury
Council of Governors chairperson Ann Waiguru (second right) addresses journalists at Delta Corner building in Nairobi on October 6, 2022. County employees risk going without salaries after governors warned that the devolved units are on the brink of total paralysis due to a cash crunch.
What you need to know:
- County employees risk going without salaries after governors warned that the devolved units are on the brink of total paralysis due to a cash crunch.
- Governors blamed the situation on continued delays in the disbursement of funds to counties, now standing at more than Sh51.7 billion.
- They gave the National Treasury up to Monday to release the outstanding amounts.
County employees risk going without salaries after governors warned that the devolved units are on the brink of total paralysis due to a cash crunch.
Governors blamed the situation on continued delays in the disbursement of funds to counties, now standing at more than Sh51.7 billion.
They gave the National Treasury up to Monday to release the outstanding amounts.
Addressing journalists yesterday, Council of Governors (CoG) Chairperson Anne Waiguru said the delays and unpredictable disbursements of the equitable share revenue have negatively impacted service delivery across the 47 county governments.
She lamented that this has paralysed critical operations like payment of salaries, purchase of medical supplies, and implementation of development projects.
It has also stymied drought interventions, governors said. Ms Waiguru said 27 counties are owed Sh20.31 billion for August 2022 allocations, while all counties are owed Sh31.45 billion in September allocation.
The Public Finance Management Act, of 2012, requires the National Treasury to release funds to counties on the 15th day of every month.
“It is unfortunate that the third generation of county governments has started on a bleak note due to a lack of resources. As of today, the total outstanding arrears owed to counties stands at Sh51.76 billion,” said Ms Waiguru.
She said counties are expecting Sh29.6 billion this month, adding that she hoped “the National Treasury will comply with the provisions of the law to release the funds on time.”
Conditional allocations
CoG further said counties are owed another Sh27.68 billion in conditional allocations for the financial year ending June 30, 2022, while in the current financial year ending June 30, 2023, conditional allocations amounting to Sh37 billion remain outstanding due to a delay in the passage of the County Governments Additional Allocations Bill, 2022.
The governors, therefore, called on Parliament to prioritise the re-introduction of the Bill to facilitate the disbursements of conditional allocations to counties to enable the devolved units to complete stalled development projects.
“We note that the National Assembly, during its first sitting, re-introduced some bills that were not finalised in the 12th Parliament. It is noted that the County Governments Additional Allocations Bill, 2022 was not among the prioritised bills,” said Ms Waiguru.
At the same time, the governors decried the directive from the Controller of Budget that no salaries will be paid outside the United Human Resource Information System.
They said the directive will affect casual workers who are not on the payroll but who now risk not receiving salaries for pending and subsequent months.
“To resolve the payment issue, county governments will furnish the Office of the Controller of Budget with the required information to facilitate payment of their salaries,” Ms Waiguru said.
CoG also announced that starting next year, devolution conferences will be celebrated biennially. Next year’s event will be held in August under the theme “Ten Years of Devolution: The Present and the Future”.
