County governments were underfunded by Sh50.5 billion due to a fall in tax revenues, a Cabinet meeting was told Thursday.
The parley chaired by President Uhuru Kenyatta also highlighted the fiscal performance for the first six months of the current financial year; the challenges being encountered during budget implementation; and the proposed revisions to the proposals for submission to Parliament.
The Cabinet noted that a revenue performance during the first six months of the financial year fell short of the target by Sh 67.7 billion.
The National Treasury is yet again accusing county governments of failing to fully utilise funds disbursed to them by close of the financial year.
Treasury says idle resources left by the devolved units in their accounts every financial year suggests “challenges in executing budgets and opportunity costs of undelivered public services” by the regional governments.
“Experience from the last two financial years highlights an increase in idle cash resources held by counties, predominantly at their respective County Revenue Funds (CRF) accounts at the Central Bank of Kenya,” says the Treasury in the medium-term budget policy statement dated February.
To address this and improve absorption of funds, Treasury plans to automate the current cash flow planning and exchequer requisition process and also enforce existing guidelines on management of imprests by county officials.
It also plans to initiate discussions with the Controller of Budget on how to streamline withdrawal of funds by counties.
Treasury says it will also prioritise disbursement of funds to counties with least fund balances at the CBK. “This is supported by the Constitution (Article 201 (d), which requires that public money be managed prudently and responsibly,” says Treasury.