Counties yet to get Sh30b from Treasury
Anthony Mwangi and Oliver Musembi
A technical hitch in the Integrated Financial Management Information System (IFMIS) and government bureaucracy have delayed Treasury’s disbursement of Sh29.7 billion to county governments, crippling service delivery in the devolved units.
Council of Governors (CoG) chairman Wycliffe Oparanya told People Daily yesterday that two weeks after Treasury Cabinet Secretary Ukur Yatani announced the release of the funds, they were yet to reach the 47 county governments because of a technical hitch in the IFMIS, and other government bureaucracies.
Oparanya said that as a result, a majority of the county governments are struggling to pay salaries and other operational expenditures.
According to Oparanya the Sh29.7 billion released by the Treasury was meant to pay salaries and operations for the month of June.
“When the money was released two weeks ago, IFMIS was not open and so, counties could not access the money.
Again when it was opened on Friday last week, counties could not access it due to the many bureaucracies involved,” said the Kakamega governor.
“We have asked the Treasury to apply the advisory by the Supreme Court that 50 per cent of the allocations to counties be released pending any dispute that may arise.
This has not happened and we are worried that the national government is using this to cripple devolution,” he explained.
IFMIS is an automated system that is used for public financial management. It interlinks planning, budgeting, expenditure management and control, accounting, audit and reporting.
It is designed to improve systems for financial data recording, tracking and information management in the wake of increased demands for greater transparency and accountability in the management of public finances.
Release announcement
Two weeks ago, Yatani announced the immediate release of the Sh29.7 billion to avert a cash crisis in the counties.
Making the announcement after a crisis meeting with the CoG, the Senate leadership, the Commission on Revenue Allocation (CRA) and the Controller of Budget (CoB), Yatani said the government had resolved to disburse the close to Sh30 billion, which it had held from the previous financial year as “balance of sharable revenue of the financial year 2019-2020”.
He said the meeting had agreed to cushion the counties while awaiting the outcome of the Senate debate on the Revenue Allocation to Counties Bill, which has failed to pass despite being debated a record 10 times.
“We agreed to release the undisbursed balance of the last financial year immediately,” Yatani said.
But according to Oparanya, the disbursements are yet to trickle down to the counties, most of which are now grappling with a cash crisis that has rendered them unable to pay their workers.
Oparanya’s sentiments were shared by several governors who protested the delays in the disbursement of the funds had caused salary delays.
Machakos Governor Alfred Mutua said the county had only received money meant for the last financial year, which ended in June.
“We are currently in deep problems. We have not received any money for July and now August,” Mutua told People Daily.
Kisii Governor James Ongwae, through an aide, said the only money that was released to the county government was to fund operations.
“We only received money to fund operations such as paying salaries, but we are yet to receive any money for development,” he said.
In Embu county, suppliers and contractors who are owed more than Sh800 million are threatening to go to court while staff are yet to receive their July salaries and allowances.
In Vihiga county, workers have gone for 10 months without pay with Governor Wilbur Otichillo appealing to staff to remain calm as his government works out ways of paying them.
“Further, there has been no concrete confirmation as to when the funds would be available to clear the balances despite the announcement that Treasury had disbursed Sh29 billion to the counties more than three weeks ago,” Otichillo lamented.
Yesterday, Treasury Chief Administrative Secretary Nelson Gaichuhie said money was being released to counties on a “need basis”.
He, however, warned that counties which have not passed their budgets will not be considered, adding that about 10 of them are yet to finalise their budget making processes.
He said Treasury will consider releasing more funds to the counties should the dispute in the Senate over the revenue sharing formula persist.
The Senate is set to meet next week to resolve the impasse.
“If the Senate fails to agree on Tuesday, the National Treasury will chip in and allocate some money to the counties,” Gachuhie said.
Speaking when announcing the release of the Sh29.7 billion, Yatani explained that to further ease the financial burden counties are bearing in light of reduced incomes as a result of the Covid-19 pandemic, the national government will invoke a Supreme Court decision that allows Treasury to release up to 50 per cent of the last financial year’s allocation if senators failed to resolve the impasse over revenue sharing.
“On disbursements for this financial year, we wait for the Senate outcome. If the stalemate takes long, we will refer to a previous Supreme Court decision,” he said.
Yesterday, Oparanya said time had come for the country to come up with a solution to the perennial problem of delayed disbursement of money to counties.
“We must look for a permanent solution to this issue, it’s being used to kill devolution, in fact this is one area the BBI should address,” he said.
Amendment bill
But there appeared to be some light at the end of the tunnel for contractors and suppliers doing business with counties if a bill proposed by Thika Town MP Patrick Wainaina is enacted.
The Public Procurement and Assets Disposal (Amendment) Bill, 2020, now in the second reading, requires all national and county government tenders to be accompanied by bank guarantees, so that if the government fails to settle payment within 90 days, a contractor shall get their money from the bank, leaving the government to settle the financier.
The public has been invited to give suggestions on the bill, which will go a long way in cushioning contractors and suppliers from delayed or non-payment of tenders.
Yesterday, Wainaina invited members of the public to give their views in order to enrich the bill that is at the public participation stage.
“I am appealing to members of the public to give their input since once it goes through the second reading, there will be no room to do it,” said Wainaina.
The bill also proposes that the prices for contracts should be within 15 per cent range of engineer’s estimate to prevent cases of over-quoting and under-quoting.
