Counties face cash crunch over budget wars

July 24, 2014 3:43 pm
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Council of Governors Chairman Isaac Ruto says no county has received funding this financial year, a move likely to affect essential service provision, especially health/CFM
Council of Governors Chairman Isaac Ruto says no county has received funding this financial year, a move likely to affect essential service provision, especially health/CFM
NAIROBI, Kenya, July 24 – Governors have warned of a looming crisis in counties over delay by the central government to release funding amounting to Sh226 billion through the passing of the required Bills.

Council of Governors Chairman Isaac Ruto says no county has received funding this financial year, a move likely to affect essential service provision, especially health.

According to Ruto, the delay is occasioned by the Senate’s failure to pass the County Allocation and Revenue Act that will guide budget allocation for counties.

“Up to date no county knows how much money is likely to be disbursed; there is a tentative figure of Sh226 billion. We expect another Sh3.7billion for level five hospitals and we are yet to hear the results. There is likely to be a crisis on level five hospitals,” Ruto said at a press conference on Thursday.

Other major areas expected to be affected by the delay in releasing these funds is paying of salaries of county workers.

“We pay salaries by 25th of every month which is tomorrow, which is not going to happen,” Ruto said.

The delay is also blamed on failure by the counties to pass their budgets due to confusion over how much they should set aside for recurrent expenditure after a ceiling was capped by the Commission on Revenue Allocation (CRA).

So far, only three county assemblies have passed the budgets out of the 47 counties.

“The various county executives have prepared their budgets on basis that ensures that there is prudence and there is more money going to development. We are appealing to all the assemblies to each do their part,” Ruto urged.

Speakers of the 47 County Assemblies have already filed a case on behalf of their residents seeking to compel the Controller of Budget to oversee the implementation of the 2014/15 County Governments budgets.

The MCAs have been engaging on a war of words with CRA and the salaries commission after they were accused of spending hundreds of millions on unnecessary travels.

Under the Public Finance Management Act, the counties have room to withdraw money remaining from the last year’s budgets. But Ruto says a majority of counties have exhausted money for recurrent expenditure and there is no way they would use that remaining for development.

The governors had also blamed the National Assembly for the delay in passing the Division on Revenue Allocation Bill which guides in the sharing of the budget between the National and County government.

However, Parliament since passed the Bill after a heated debate which will now see the release of the Sh226billion, leaving the Senate and county assemblies to do their part.

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