Bumpy cash disbursement threatens counties growth

Martin Wambora

Council of Governors chairman Martin Wambora. FILE PHOTO | NMG

The incessant outcry over delayed disbursement of cash to the counties by the Treasury risks hurting the spirit of devolved governance. It must be addressed conclusively.

In the latest development, the Council of Governors (CoG) said the devolved units are faced with delaying salaries and payments to suppliers after the Treasury failed to disburse Sh105.9 billion with just a month to the close of this financial year.

Such complaints have become too common and risk hurting the profile of the counties as corporate entities.

For example, the unpredictable cash flows are becoming a put-off to suppliers who at times have to pursue payments for more than a year.

This is wrong because the late payments, in turn, hurt the suppliers’ ability to service their dues such as debt repayments or even financing of their day-to-day operations, including paying their workers. Worse, they cannot fend for their families, which is a core motivation.

This hurts the commercial relationship between the counties and suppliers and would not hesitate to cut ties.

Equally, nobody would be willing to work for counties that are unable to cater for welfare issues such as timely payment of salaries and other remunerations. The downside of this is that counties will not attract top talent employees and would have to do with poor performers who only hurt the relevance of the devolved system of governance.

But that is not all. Haphazard disbursement of funds to counties also affects their planning and accounting cycles, which lead to wastage of resources.

Delayed disbursement of funds not only hurts project delivery timelines and efficiency, it also hurts accountability because financial audits have specific timeframes which if breached can pose challenges in tracking the utilisation of cash disbursed towards various projects and programmes.

It is, therefore, important that the Treasury and counties find a lasting solution to the irregular disbursement of funds.

Allotment of cash to counties is a mandatory obligation of the Treasury and we should have a smooth disbursement to guarantee continuity in project implementation and win the confidence of suppliers and top talent who may wish to serve in the counties.

The devolution idea of grassroots development should not be frustrated or pushed to fail.