The Treasury has set aside Sh280 billion to start operations of county governments after the March 4, 2013, elections.
The money will be mainly used to set up administrative and governance structures that are vital in ensuring that the devolved functions of government starts without a hitch.
Finance Minister Njeru Githae on Monday said that the government budgetary allocations to ministries for the last quarter of 2012/13, covering April, May and June 2013, will be sent directly to counties.
“All counties will have their revenue accounts loaded with money by March 5 next year to ensure that governors who come to power run their functions smoothly,” Mr Githae said.
In view of this, the Treasury is setting up a department to spearhead the devolution of funds and oversee their usage.
It will also ensure there are sufficient personnel seconded from the headquarters to the various counties for the initial stages of devolution.
“We are aware that there might be rogue governors who may reduce county governments to employment bureaus like has been the case with countries like Nigeria, but we have put in place rules that will govern how budgets are allocated between recurrent and development expenditures,” Mr Githae said.
He spoke during the launch of public hearings on the 2012/13-2015/16 Medium Term Expenditure Framework in Nairobi on Monday.
The Treasury also said that it is coming up with ratios that will govern how the money allocated for the various functions will be used to avoid misuse of funds.
Initially, the government proposed that 40 per cent of all the money sent to counties — which, according to the Constitution, should not be less than 15 per cent of the total collected revenues — be used to finance development expenditure. (READ: Counties face crippling budget crisis)
However, Parliament intervened and settled for 30 per cent, which the Treasury says is still fine to ensure economic growth.
Some ministries, including that of Agriculture and Health, will receive the least funding since most of their functions have been devolved to the county governments.
According to the Treasury, many functions across most ministries, except six, will be devolved. Most of the revenues will, therefore, be sent to county governments to finance operations.
Notwithstanding Mr Githae’s approval of assured funds for the counties, the Parliamentary Budget Committee and the Commission for Revenue Allocation (CRA) have urged the House to hasten its pace as it resumes next week to ensure that pending Bills vital for devolution are enacted.
Those pending include the Division of Revenue Bill 2012 and The County Allocation of Revenue Bill that will guide how the 47 counties will share revenues.
“Public money cannot be paid to county governments without these necessary pieces of legislation to guide the exercise,” said CRA chairman Micah Cheserem.
He noted that it will be a disaster if the counties are not funded from day one owing to the functions passed onto them.