A crisis is looming across county governments after the Treasury failed to release their equitable share of revenues since July, leaving some of them unable to pay workers and suppliers.
Treasury was supposed to release Sh100 billion in equitable share to the 47 counties to cover for the first quarter of the current fiscal year (July, August, and September) but has not released the money, a situation blamed on the lack of a legal framework for disbursement.
On Thursday last week, the Council of Governors (CoG) wrote to the Senate’s Finance Committee raising concerns over the delayed disbursements, which it said had paralysed the operations of counties.
“As of the date of this letter (September 5, 2024), no county has received its July, August and September 2024 allocations on the premise that there is no legal framework for disbursement since there is no County Allocation of Revenue Act in place.
“We note that the current status has paralysed the operations of counties with regards to continuity of service delivery, payment of suppliers, and remuneration of county employees,” CoG’s Chief Executive Mary Mwiti said in the letter.
Ms Mwiti said the situation was threatening the functioning of counties: “This situation does not affect the national government, which has continued to operate normally and uninterrupted.”
Already, several counties have not paid August salaries for their workers citing the delays. In a memo to all county government staff, Busia County last Friday noted that it was waiting for Treasury to release the disbursements before it could pay them.
“This is to inform you that there will be a slight delay in the processing of salaries for the month of August 2024 occasioned by delayed disbursement from the Exchequer,” the county said in a memo.
Other counties including Kiambu and Meru are also reported to have delayed their workers’ salaries, with Kiambu County workers missing August salaries and Meru workers since June.
Meru County’s case, however largely stems from disputes between Governor Kawira Mwangaza and her county assembly which led to delays in approval of the county’s budget until August last month, though the county hasn’t also received 2024/25 disbursements.
In the letter to the Senate’s Finance Committee, the CoG argued that even in the absence of a County Allocation of Revenue Act, the law provides room to have the Public Finance Management (PFM) Act, 2012 invoked for the Controller of Budget (COB) to approve withdrawals of up to half of the previous year’s equitable share from the consolidated fund.
“If the County Allocation of Revenue Bill submitted to Parliament for a financial year has not been approved by Parliament or is not likely to be approved by Parliament, by the beginning of the financial year, the Controller of Budget may authorize withdrawals of up to 50 percent from the Consolidated Fund based on the last County Allocation of Revenue Act approved by Parliament for the purposes of meeting expenditure of the county governments for the financial year,” the PFM (National Government) Regulations, 2015, states.
