Controller of Budget Margaret Nyakang'o has piled pressure on the National Treasury over delays in disbursing funds to counties and demanded the cash be released on a timely basis to ensure that budget implementation in counties is not adversely affected.
Senate Speaker Kenneth Lusaka has ordered National Treasury Cabinet Secretary Ukur Yatani to appear before the Finance and Budget Committee on Tuesday to explain the delay in disbursing Sh103.5 billion.
In the letter to the CS, Mr Lusaka threatened to have Mr Yatani arrested over his failure to explain the delays, expressing concerns that the failure to release the funds undermines the principles and objects of devolution as detailed in the constitution.
Dr Nyakang'o has flagged the delays in the 2020/21 County Budget Implementation Review third quarter report published last week.
"The National Treasury should disburse funds to the counties on a timely basis to ensure that budget implementation is not adversely affected," she says in the report.
The Constitution provides that that the allocation due to counties shall be transferred to the respective County Revenue Fund in accordance with a Disbursement Schedule approved by the Senate.
The schedule shows that by March 30, 2021, counties should have received Sh235.79 billion, which translates to 74.5 per cent of the 2020/21 equitable share allocation of Sh316.5 billion.
However, in the first nine months of 2020/21 financial year, the National Treasury had disbursed a total of Sh158.7 billion to the counties, which accounted for 50.2 per cent of the annual equitable share of revenue raised nationally.
The Sh158.7 billion excludes Sh26.22 billion outstanding equitable share of revenue raised nationally for the 2019/20 financial year, which was disbursed in August 2020.
The approved aggregate budget estimates for the 47 county governments in 2020/21 financial year amounts to Sh500.7 billion which comprises Sh193.3 billion (38.6 per cent) allocated to development expenditure and Sh307.4 billion (61.4 per cent) for recurrent expenditure.
To finance the budgets, county governments expect to receive Sh316.5 billion in equitable share, Sh23.16 billion as total conditional grants from the national government, Sh30.20 billion as total loans and grants from development partners. They should generate Sh56.02 billion from own revenue sources, and utilise Sh50.25 billion cash balance from the 2019/20 financial year.
The total funds available to the county governments in the first nine months of 2020/21 amounted to Sh251.09 billion.
This amount consisted of Sh158.7 billion as equitable share for 2020/21, Sh16.59 billion as conditional grants from development partners, Sh50.25 billion unspent cash balance from 2019/20, and Sh25.52 billion raised from own sources. The unspent cash balance from 2019/20 includes Sh26.22 billion, which was released to county governments in August 2020.
Promises not kept
The CoG's Finance Committee, which is chaired by Laikipia Governor Ndiritu Muriithi, has held several meetings with Treasury officials in which Mr Yatani promised to release the arrears by the end of May 2021.
The promise is yet to be honoured and the arrears due to the 47 counties have skyrocketed to Sh103.5 billion, with just over two weeks to the end of the 2020/21 financial year.
Out of the Sh103.5 billion, all counties are owed Sh26. 9 billion for June, Sh25.3 billion for May, Sh28.4 billion for April and Sh15.3 billion for March.
The March arears only concern 20 counties as the National Treasury has cleared with 27 others.
Out of the global figure, the arrears due to Nairobi county stand at Sh12.8 billion. Nairobi is yet to receive Sh3.5 billion as arears for the last financial year, another Sh2.6 billion for January this year, Sh1.35 billion for February and Sh1.27 for March.
Others whose arrears are big are Nakuru (Sh3.5 billion), Turkana (Sh3.5 billion), Mandera (Sh3.4 billion), Kilifi (Sh3.4 billion), Kakamega (Sh3.4 billion) and Wajir Sh2.8 billion.
County governments have incessantly complained that the slow and inordinate delays in disbursement of their share of revenue collected nationally has interfered with service delivery.
This has forced the intervention of the Committee on Finance and Budget which is chaired by Kirinyaga senator Charles Kibiru.
However, attempts to address the issue have failed as Mr Yatani has spurned at least three invitations by the committee, forcing Mr Kibiru to file a complaint to the Speaker's office on the CS's conduct.
The CS had been invited to appear before the committee on May 26, but the meeting was rescheduled at his request to June 3 but which also fell through after the CS did not show up.
"The matter that the committee seeks to deliberate with you has a direct impact on the ability of the counties to discharge their functions under the 2010 Constitution," Mr Lusaka says in the letter, demanding that the CS personally attend a meeting of the committee to be held tomorrow.
"Should you fail to attend the meeting, the Senate will be constrained to exercise its powers under section 18 of the Parliamentary Powers and Privileges Act, 2017.
Section 18 of the Act invokes article 125 of the Constitution, which gives the committees of Parliament the power similar to those of the high court to summon witnesses or arrest those who defy the summons.