Kenya: CoG Objects National Treasury Move to Retain Funding for 10 Counties Over Uncleared Bills

10 December 2019

Nairobi — The Council of Governors (CoG) on Tuesday raised objections to the fresh attempt by the National Treasury to withhold funding for at least 20 more counties because they are yet to clear their pending bills.

CoG Chairperson Wycliffe Oparanya Tuesday said the move to isolate some counties in the disbursement of funds from the Exchequer negates the spirit and letter of devolution which connotes effective service delivery to the citizens.

He further stated that the method used by National Treasury to categorize County Governments did not consider the efforts made to settle the pending bills and only concentrated on payment of pending bills between July 1, 2019 and October 31, 2019.

"Withholding development funds by the National Treasury creates a crisis in service delivery by the County Governments as development is pegged on available resources."

"County Governments have progressively made deliberate efforts to settle pending bills which includes those inherited from the local authorities. The method used by National Treasury to categorize County Governments did not take into account the issue of historical debts," the Governors lobby group stated.

The fresh notice comes barely a week after both the National Assembly and Senate rejected another request by acting National Treasury Cabinet Secretary Ukur Yatani to an initial 15 counties giving them until December 1 to clear the bills, failure which funds would be locked.

The Houses of Parliament recommended that a better strategy should be drawn up because the National Treasury cannot stop the whole budgetary allocation to the counties.

Under the law, the CS National Treasury cannot also stop the transfer of more than 50 per cent of funds due to a country government.

CS Yatani cited the counties for failing to heed the resolutions of the Intergovernmental Budget and Economic Council (IBEC) chaired by Deputy President William Ruto.

The IBEC resolved that county governments would pay eligible pending bills on a priority basis as a first charge on the County Revenue Fund by the end of 2019-20.

Counties owed their suppliers Sh64.2 billion as of October 28.

Oparanya who is also the Kakamega Governor warned devolved units were unable to provide basic services because the National Treasury is yet to release the November monthly disbursement amounting to Sh31.6 billion which was due in mid last month.

"Whereas the earlier delay on disbursements of funds was attributed to expiry of term of the Acting Controller of Budget, the Council notes that the President appointed the new Controller of Budget through a gazette notice dated 4th December, 2019 hence approval of disbursements of funds should be fast tracked to allow County Governments to realize their targets for the quarter."

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