Governors to sue State for delaying funds

Governors are this week expected to sue the National Treasury for alleged failure to disburse funds for counties even as they look to borrow from banks to fill gaps left by the slow or late release of money.

Their justification is the need to avoid stalling service delivery as strikes become endemic with health workers being the latest to down their tools over late pay.

Bomet Governor and former Council of Governors chairman Isaac Ruto says they have been forced into this route after their plea to have money released by 15th of every month as per the Constitution fell on deaf ears.

“What we have done is to negotiate with banks to be paying salaries and recover the monies when we get funds from the National Treasury.”

His Wajir counterpart Ahmed Abdullahi says the arrangement with the financial institutions is based on good will.

“There are times we have had to make arrangements with our bankers to lend us money on understanding we would make good our positions shortly. It is based on rapport with them,” he said.

Details of the arrangement are, however, scanty even as the Controller of Budget Agnes Odhiambo warns that counties could be taking illegal loans that attract exorbitant interests.

Most of the governors referred us to their Executive officers in charge of finance for details of the deal although we were able to establish that the overdrafts attract interest rates of between 5 and 10 per cent with a potential of plunging counties into debt.

The revelation has brought into focus the dilemma county chiefs find themselves in as they run their governments with stringent financial guidelines that do not allow them to borrow without authorisation by the national government.

TO STAY AFLOAT

“If money could be coming on time, we would not take this route to stay afloat. The process of getting the money is too bureaucratic. Following up the disbursements is almost a full time job for our chief finance officers who are at times forced to spend up to two weeks in Nairobi moving from one office to the other,” Governor Abdullahi said.

Kisii Governor James Ongwae says the National Treasury has not released funds to counties from June.

“The recurrent strikes have nothing to do with devolution. The Treasury has not released funds since June. How do you expect counties to pay salaries and run operations without resources?” he posed.

The Public Finance Management (PFM) Act 2012 provides that borrowing by county governments must be approved by the county assembly and guaranteed by the Treasury.

Early this month, Deputy President William Ruto indicated that a law is in the pipeline to allow governors to borrow for development projects, removing the current stringent rules.

And with the persistent worker strikes, governors are turning to the courts to order the National government to release funds without further delay.

The suit that the Council of Governors has instructed Senior Counsel Ahmednasir Abdullahi to file also seeks to challenge a number of laws passed by the National Assembly that they say are meant to kill devolution.

A guarded Mr Abdullahi told Sunday Nation that controversy around the provision of health function is among the seven issues the case would focus on.

“We want to solve this matter of national government versus counties once and for all,” he said.