Treasury secretary Henry Rotich at a past event. FILE
What you need to know:
In a newly published County Allocation Bill Treasury has reduced direct allocation to the devolved units to Sh194.1 billion.
The new figure is Sh36.7 billion lower than the Sh230.8 billion that the Commission on Revenue Allocation (CRA) recommended just a few weeks ago.
County governments face a financing shock as the Treasury puts on hold their ambitions to control rural electrification and donor funds from July.
In a newly published County Allocation Bill Treasury has reduced direct allocation to the devolved units to Sh194.1 billion.
The new figure is Sh36.7 billion lower than the Sh230.8 billion that the Commission on Revenue Allocation (CRA) recommended just a few weeks ago.
“The CRA’s basis of costing of the new structures is not clear and the costing of the new administrative structures is overstated,” Treasury secretary Henry Rotich said.
The minister is proposing to allocate Sh228 billion to the 47 counties. The money is equivalent to 35 per cent of last audited national revenues but Sh10 billion lower than the Sh238 billion that the Intergovernmental Budget and Economic Council recommended for the financial year 2014/15.
The Constitution requires the allocations to be based on the latest audited revenues, in this case the 2011/2 year, but CRA relied on the 2012/3 collections.
The adjustment has also seen cash meant to cover new structure and staff moved to counties fall by 18.1 billion from CRA’s proposed figure of Sh48.3 billion.
The changes are likely to set off a fresh dispute between the two levels of government as governors have lately been agitating for increased allocation.
“When all the functions are fully devolved, we expect the allocation of at least 50 per cent of the national revenues to counties,” Council of Governors chairman Isaac Rutto said in an earlier interview.
