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Cash crunch hits counties as funds delay.

Governors yesterday asked the national government to release funds allocated to counties as the delayed disbursement has disrupted services.

In a statement, the Council of Governors chairperson Josephat Nanok blamed the government for withholding the billions of shillings that were to be released by June 30 in the last financial year.

Nanok said the government has failed to follow the laid down legal procedures to disburse county funds and should stop claiming that counties are holding billions of unspent finances.

'As of June 30th 2018, Counties had still not received Sh76.7 billion disbursements representing about 26 per cent of the total allocations,' Nanok said.

The county chiefs were responding to an advertisement by the Controller of Budget in the dailies on Tuesday claiming counties had not spent billions of funds allocated to them in the last financial year.

The Public Finance Act directs the national government to disburse county funds quarterly.

'The National Treasury shall, at the beginning of every quarter, and in any event not later than the 15th day from the commencement of the quarter, disburse monies to county governments,' the Act reads.

The government first disbursed Sh13 billion on August 31, 2017, and the second Sh10 billion on October 19, 2017.

'This is the sort of erratic disbursement the council insists affects absorption of funds and worse still when close too Sh53 billion is released on the last date of the financial year,' Nanok said.

Governors said counties can only absorb what they have depending on the time they receive.

'Three months into the end of the financial year, from the Controller of Budget's report it clearly notes that counties had only received Sh174.52 billion out of the Sh302 billion equitable share allocation,' Nanok said.

More: CS Rotich summoned over disbursement of county cash

Nanok said no monies were released to counties by the 15th of July since the County Allocation of Revenue Act 2017 was approved on 27th July, 2017, way after the financial year had began.

'This means that a balance of Sh128 billion was yet to be disbursed by then,' he said.

'Nonetheless, whenever there are cash flow challenges like what the counties have experienced over time, a lot of emphasis is placed on recurrent expenditure including payment of salaries as well as administrative costs and statutory obligations to ensure that administrative services are not stalled,' he added.

On Monday, Samburu Governor Moses Lenolkulal blamed the piling county bills on the delay of funds disbursement by the Treasury.

Appearing before the Senate's County Public Accounts committee, Lenolkulal appealed to the Senate to intervene. He faulted the monthly disbursement and instead rooted for reintroduction of the quarterly system. Controller of Budget Agnes Odhiambo, in her 2016-17 report, totalled non-paid bills in the counties at Sh99 billion.

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Publication:The Star (Nairobi, Kenya)
Date:Aug 2, 2018
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