Economy

Governors threaten to sue Treasury in Sh84bn row

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Council of Governors chairman and Turkana governor Josphat Nanok with other governors during a media briefing in Nairobi. PHOTO | DENNIS ONSONGO | NMG

Governors have threatened to move to court to recover Sh84 billion withheld by the National Treasury from the last fiscal year even as agencies disagree over amount of money owed to the 47 counties.

Turkana governor Josphat Nanok, the chairperson of Council of Governors (CoG), said the National Treasury released only Sh218 billion out of the equitable share of Sh302bn published in the Division of Revenue Act 2017.

“If Parliament does not intervene, then the CoG will have no option but to go to court to protect counties from this illegality,” Mr Nanok told the Business Daily last week, saying the CoG had written to both Houses of parliament to intervene.

“The Public Funds Management Act requires all outstanding disbursement to counties be cleared by June 30, which is the end of the financial year.”

The Commission on Revenue Allocation (CRA), a State agency that advises on revenue sharing between the two levels of governments has, however, disputed the claims by the counties saying the Treasury had released the entire Sh302bn for 2017/18.

If there is any pending figure, then the county bosses may have overspent on false hope that their extra expenditure plan would be approved by the Treasury, CRA chairperson Jane Kiringai reckoned last week.

“The Gazette notice that CoG had attached was proposed but was not approved by Parliament so Treasury did not revise the county equitable share,” said Dr Kiringai.

READ: Treasury under pressure as northern counties demand Sh12bn kitty

Last week, Mr Nanok stood his ground saying failure to remit the cash allocated to counties had led to cash crunch in Kericho, Taita-Taveta, Kilifi and Busia, delaying salaries for their staff in February as others struggled to purchase drugs.

When he unveiled the budget for 2018/19 last month, Treasury secretary Henry Rotich directed all counties to prioritise clearing all pending payments by including them in their spending plans for this financial year as first charge on revenues.

The first disbursement for the current financial year is expected this month. Mr Nanok has warned that continued failure by Treasury to meet commitments made in the last financial year will further balloon the pending bills.

The delayed funds saw 14 counties incur zero expenditure on development in the first half of the 2017-18 financial year.