Deputy President Kithure Kindiki has called for dialogue between Controller of Budget Margaret Nyakango and governors over the decision of the former to stop disbursement of county bursaries to students.
Speaking on Monday during the 26th session of the Intergovernmental Budget and Economic Council (IBEC) at his Karen residence, Prof Kindiki urged both parties to avoid confrontations and seek an amicable solution to the ongoing stalemate.
"When we met last time, there were issues around fostering an understanding between the Council of Governors and the Controller of Budget, which is one of the independent offices. And I think that matter is a work in progress, and we did achieve some consensus around the issues which were on the table at that time," said Prof Kindiki.
"The purpose, therefore, of today's meeting is to try and build consensus, even as we approach the next financial year, so that we can agree on how to share the revenue between the two levels of government.
“When you have different institutions, different offices, it is normal for us to have differences of opinion on a matter. What is not normal is to attack each other or to be confrontational and to bring disrespect to any of the offices that are established by our Constitution," Prof Kindiki explained.
The dispute arose from Dr Nyakang'o's directive to all 47 counties, instructing them to stop allocating bursaries to students. The multibillion-shilling student bursary scheme is the backbone of the education of millions of poor learners.
But the Controller of Budget (CoB) stopped governors from awarding bursaries to students in primary, secondary and tertiary levels of education.
However, in a joint communique, the two warring parties agreed that all counties that have established distinct funds continue to draw disbursements for Financial Year 24/25.
“Any other County Governments that have yet to establish distinct Funds to expeditiously put such Funds in place, or in the alternative pursue Inter-Governmental Participatory Agreements with the Ministry of Education,” read the communique.
“Subsequently, a formal engagement to be undertaken among the National Treasury, COG, Ministry of Education and COB to formulate a sustainable engagement framework.”
Furthermore, IBEC agreed that the National Treasury reviews the budgets in line with the gazetted devolved functions to ensure that national government ministries, departments and agencies cease to hold funds for any devolved functions.
According to the CoB, financial aid for education falls under the jurisdiction of the national government.
The move by Dr Nyakang'o sparked fury among governors and the Orange Democratic Movement (ODM), just months after MPs debated a proposal to consolidate all bursary schemes under the Ministry of Education, but with them having a big say.
MPs wanted the bursaries under the National Government Constituencies Development Fund (NG-CDF), the National Government Affirmative Action Fund, and other county and ward-based schemes put into one fund managed by the Ministry of Education, but which they later said could be placed under their watch in what could lead to a further clash with other political leaders.
In the counties, governors usually set aside millions of shillings in bursaries, an expenditure that Dr Margaret Nyakang'o now says is irregular as only Early Childhood Development Education (ECDEs) is devolved.
Dr Nyakang’o’s directive, however, drew sharp criticism from governors, who argue it undermines county efforts to support education and negatively impacts students relying on the funds.
Several governors have called for the immediate reversal of the directive, stressing the importance of uninterrupted financial aid to students. Some have even hinted at pursuing legal action to challenge the decision.
The deputy president further acknowledged lingering issues surrounding the disbursement of funds to counties and called for consensus on key fiscal matters.
"I think we still have some outstanding issues around disbursement, and I think the National Treasury Cabinet Secretary will be briefing us on where we are on that one so that we can again make sure that counties receive the funds they require to be able to carry out their functions,” said DP Kindiki.
"We had anticipated to build some consensus on the county government's additional allocations bill or law. We didn't manage because parliamentary leadership has been on recess."
And to avoid subsequent instances of altercations, IBEC agreed to that CoG and CoB establish a customer desk to receive and process on behalf of the devolved unit, and any emerging issues related to the approval process for withdrawal of funds from the County Revenue Fund.
Speaking at the same forum, Council of Governors Chair and Wajir Governor Ahmed Abdullahi raised concerns over delayed disbursements, revealing that the national government owed counties Sh48 billion.
"On disbursements, as you have mentioned, we have two types of disbursements that are in arrears. There is about 15 billion for 23 counties relating to the month of December, and 33 billion, thereabout, for all the 47 counties relating to the month of January. I'm hoping that the CS Treasury will discuss that," he said.
IBEC agreed to have the National Treasury commit “to disburse pending December disbursements to county governments in the month of January 2025, and endeavour to disburse January and February allocations within the month of February 2025 and monthly thereafter.”
