Treasury to bear county loans over delayed payments

November 12, 2015 7:57 am
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Senators led by committee chairman Billow Kerrow put the CS to task over what caused the constant delays further accusing him of micro-managing counties/FILE
Senators led by committee chairman Billow Kerrow put the CS to task over what caused the constant delays further accusing him of micro-managing counties/FILE
NAIROBI, Kenya, Nov 12 – The National Treasury will be forced to pay billions in loans incurred by counties due to delays in disbursement of funds, the Senate has warned.

During an appearance before the Senate Finance Committee, National Treasury CS Henry Rotich was urged to expedite the process to ensure operations in the counties do not ground to a halt with senators dismissing his notion that Treasury disbursed the monies based on how much balance the counties had in their accounts.

Senators led by committee chairman Billow Kerrow put the CS to task over what caused the constant delays further accusing him of micro-managing counties.

“You are going to end up with billions of shillings in loans taken by counties that you will be forced to pay if you do not regularise the transfer of monies to the counties,” said Kerrow.

Referring to a letter by the Council of Governors warning of court action against the Treasury, Kerrow said it was unnecessary to initiate litigation between the two levels of government and instead urged the CS to ‘pull up his socks’.

READ: COG petitions Senate over delayed funds, accuses Treasury of sabotage

Rotich disputed the Senators claims saying the monies they relied on did not come consistently but clarified that they had since disbursed the delayed funds.

“We have disbursed all the funds for July, August September. We are now in the process of disbursing October funds which will be sent part of it this week and the rest next week,” said Rotich.

He went on to state that five counties whose balances were very low had already received their October funds insisting that they were forced to prioritise on which counties needed the money and were spending the money justly.

“The new Constitution requires us to be cash prudent and we have been monitoring the balances of many counties. Instead of funds lying idle at the Central bank, we want to ensure it is working…other government entities also need the monies,” stated Rotich.

Counties that had the highest balances in the Central Bank were Makueni and Mandera with Sh2.7 billion each while the county with the lowest balance is Sh173 million.

“it should not be your headache when counties hold money in their accounts, let the headaches be the Senate’s,” said Anyang’ Nyong’o.

The CS stated that while other counties were skilled in planning and allocating money appropriately, other needed capacity building.

He further admitted that although IFMIS and e-procurement were facing teething problems and resistance from many counties, the system was on course and would not be abandoned because it will held seal leakages that have constantly led to loss of public funds.

He said they needed to build capacity by training more officials to run the systems in the counties to ensure the practice of accountability is entrenched in the public.

“We have been engaging governors but these issues are tough. We expected resistance because of its transparency but we urge you to help us, we are enhancing connectivity and also training more staff,” he implored the Senate.

He also said the recent financial crisis in the country had been contained admitting that the challenge had been in matching revenue to the ex-chequer.

“Interest rates are down and this is an indication that the high liquidity has eased,” he indicated.

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