The Treasury is mulling advance payments to counties that will ease a cash crisis caused by a stalemate over a Bill that guides revenue sharing between the national government and the devolved units.
Acting Treasury Secretary Ukur Yatani told the Senate that the plan is to allow counties to access 50 percent of the Sh310 billion that the National Assembly had agreed to allocate them.
This comes as workers in 20 counties prepare to down tools today over July salary delays after governors ran out cash due to the delayed Division of Revenue Bill.
The Bill stalled after disagreements on allocation between the National Assembly and Senate.
“In the interim, we are proposing that counties be allowed to access 50 percent of Sh310 billion as the two Houses resolve the stalemate,” Mr Yatani told the Senate Finance Committee.
Tuesday’s meeting sought to allow parties to consider possible options to finance operations in the counties as they await the passing of Division of Revenue Bill and County Allocation of Revenue Bill.
The National Assembly agrees with the Treasury to allocate counties Sh310 billion as equitable shared revenue, but the Senate wants Sh335 billion in line with the Commission on Revenue Allocation advise.
The Council of Governors differed with the Treasury’s basing the advance payments on Sh310 billion, arguing the figure is not backed in law.
Mr Yatani said the figure is merely a basis that can be moved up or brought down at a later date. He said the Treasury is awaiting an advisory opinion from the Attorney General on the 50 percent advance payment proposal.
“We need to be realistic on how we handle this as the idea of borrowing is not an option anymore,” he said.
In the four months to October in the financial year to June 2018, the Treasury did not release county funds due to contradictions in the Senate’s approved disbursement schedule and the cash allocation law President Uhuru Kenyatta approved.
None of the 47 devolved units had received funds at the close of the first quarter in September.
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