Counties to sue over withheld billions in conditional grants

The dispute between county governments and the National Treasury over delayed disbursement of billions in conditional grants is headed to the High Court.

The Council of Governors (CoG) said it had petitioned the court to direct the National Treasury to release the funds without further delay and ease the financial crunch which has disrupted key services.

The CoG chair and Kakamega governor Wycliffe Oparanya said yesterday that the delay meant that thousands of workers in the 47 counties had not received their November salaries.

“Further delay of funds will be illegal in view of the fact the due process will not have been followed, given that the Constitution dictates that a county’s share of revenue raised by the national government shall be transferred without undue delay,” said Mr Oparanya.

The CoG chairman accused the Treasury of using the issue of pending bills owed by counties as an excuse not to release the money.

“We don’t want a situation where the National Treasury will be seen to be micromanaging county governments through stoppage of funds without following the due process as set out in law,” said Mr Oparanya.

His remarks came as the Treasury released another circular saying 20 counties will have their conditional grants withheld over failure to pay all eligible pending bills.

The circular dated December 5 and received by the CoG on December 9 lists Taita Taveta, Turkana, Kisumu, Meru, Samburu, Nakuru, Murang’a, Mandera, Kisii and Busia as those who will miss on transfer of their conditional grants.

Others are Marsabit, Bungoma, Siaya, Trans Nzoia, Kitui, West Pokot, Embu, Kakamega, Wajir and Lamu.

Acting Treasury Cabinet Secretary Ukur Yatani referred the affected counties to another circular dated October 22 that provided all the county governments with guidelines on settlement of pending bills.

Conditional grants have become the main source of development funds in counties as disbursements from equitable share mainly go into recurrent expenditure.

The source of the grants includes the World Bank’s Kenya Urban Support Programme, Danida’s health programmes, NARIGP for agricultural support and the European Union that supports construction of major water projects.

Mr Yatani said the stoppage of transfers was part of the National Treasury’s interventions for purposes of expenditure control in cases where county governments are involved in serious material breach of the law relating to public finances.

The 20 counties are required to provide a repayment plan specifying how they intend to clear all the pending bills.