Inside governors' plan to unlock revenue sharing stalemate

County Governors are keeping their fingers crossed as a technical committee headed by the National Treasury meets this morning (Monday) to break the deadlock surrounding disbursement of funds to devolved units.

The 47 counties have been staring at a financial crisis, with operations likely to grind to a halt as Senators bicker over the proposed revenue-sharing formula.

For the sixth time, Jubilee and opposition senators on Tuesday last Week failed to end the stalemate over the blueprint authored by the Commission on Revenue Allocation (CRA), even after extending their sitting into the night.

Coupled with the fact that the National Treasury has not disbursed the June and July allocations, the devolved units are likely to be in bigger problems if the deadlock is not unlocked.

Yesterday, Council of Governors (CoG) Chairman Wycliffe Oparanya told the Nation that county bosses are now banking on a technical committee meeting convened by Treasury and Planning Cabinet Secretary Ukur Yatani for a solution to the impasse.

CURRENT FORMULA

Mr Oparanya told the Nation that they will be pushing for application of the current revenue sharing formula if the Senate fails to approve the new one.

“The law is clear that we continue with the current formula in case of a stalemate. After all, the new formula was supposed to have been passed one and a half years ago,” he said.

“The Constitution says that the first formula will be for three years. We had the first one between 2013 and 2016, the second one began in 2016 all though to 2019. So we would have then used the new formula last year but it was not ready,” Mr Oparanya added.

He pointed out that the law is clear “that if there is any disagreement or delay, the current formula continues.”

Mr Yatani convened a crisis meeting with Senate leadership, the CoG, the Controller of Budget and the Attorney General today to unlock the stalemate.

In his letter dated July 30, 2020, Mr Yatani invited the officials for the virtual meeting to unlock funds transfer to County governments for the Financial Year 2020/21.

“In light of the delays in approval of the County Allocation of Revenue Act, 2020, the National Treasury is calling for a meeting to discuss options of unlocking funds transfer to County governments to ensure smooth delivery of services,” Mr Yatani said in his letter to the officials.

MINORITY SIDE

Mr Oparanya yesterday raised concerns that the Minority side of Senate was not involved in the matter as per the CS's letter.

“Minority side ought to have also been invited because it is necessary as we seek to find a solution to this stalemate,” Mr Oparanya said.

Yesterday, Senate Minority Chief Whip Mr Mutula Kilonzo Jnr told the Nation that the Treasury CS’s letter was to be amended to accommodate the Minority into the meeting.

“I am aware they were requested to amend the letter as it was a mistake. However, to this extent, we don’t know what they want to ask. I will wait to see the agenda,” Mr Kilonzo said.

Those set to attend the meeting, according to Mr Yatani’s letter, include Senate Speaker Kenneth Lusaka, Council of Governors Chairman Wycliffe Oparanya and CoG Finance Committee chairman Wycliffe Wangamati. Others are Senate Majority Leader Samuel Poghisio and Majority Chief Whip Irungu Kang’ata.

Also on the team is Attorney General Kihara Kariuki and Controller of Budget Margaret Nyakang’o.

“This is sort of a technical meeting and the purpose is to find an amicable solution around the issue of the disbursement of funds to counties,” the Kakamega Governor said.

“We are now in August and so far counties have not got payments for two Months...What is more contentious is that they never paid the June one and this has never happened since the advent of devolution in 2013,” he added.

He said Treasury always struggles to ensure that all disbursements due are “at least disbursed even if they come late, they come either in the first Week of July or the last week of June.”

“But this year is unique in that there is now a carry forward of a whole Month of June and that issue is not provided for in legislation. So how you deal with such a case? That is what we will be seeking to resolve ahead of the Tuesday Senate sitting,” added Mr Oparanya.

CONTINUITY NEEDED

On Saturday, Senate Speaker Kenneth Lusaka confirmed the Monday meeting, citing an urgent need to find a solution and save the counties from financial crisis.

“We want to see how we can unlock the deadlock because counties need to continue with their operations. We are going to discuss how we can deal with the delays in the formula and salvage the counties from the financial crisis before a decision is made on Tuesday,” Mr Lusaka told the Nation.

“We must find a solution to this matter and also ensure both the Senate and National Assembly are safe in terms of their responsibilities over this matter, and the National Assembly not to be seen as taking the role of Senate in revenue allocation.”