Efforts by the National Treasury to have 15 county governments that have failed to clear their pending bills denied cash suffered a blow yesterday after a parliamentary committee declined the request.
The Budget and Appropriations Committee made the decision after a session with the Parliamentary Budget Office Director Phyllis Makau.
Last month, acting Treasury Cabinet Secretary Ukur Yattani requested MPs to have Parliament stop transfer of funds to the 15 counties, noting that they had contravened the Public Finance Management (PFM) Act by failing to make any efforts to clear eligible pending bills.
He wanted the directive to be effected from December 1, arguing that the lack of commitment from the devolved units had affected economic growth and inconvenienced Small and Micro-Enterprises and other business segments at the county level.
However, Kikuyu MP Kimani Ichung’wah, the chairman of the Budget Committee, said they cannot approve the request because of various technicalities in law as raised by Ms Makau.
“We will not approve this request because the Controller of Budget has not submitted a report to this committee. We will make our position on this matter known because the Treasury may go ahead and stop the funds to the counties,” Mr Ichung’wah said.
Mr Yattani says the bills have remained static between July 1 and October 31 despite numerous engagements and issuance of circulars to settle the bills.
The PFM Act provides that pending bills shall be the first charge on the budget of a government entity once its respective budget has been appropriated by the National Assembly.
Section 97 (3) of the PFM requires the Controller of Budget (CoB) to within 14 days investigate the Treasury’s request to stop the funds and submit a report to Parliament. However, the absence of a substantive COB complicates the request by Treasury.
The recruitment process of a new CoB is yet to be finalised after the former officeholder Agnes Odhiambo’s eight-year non-renewable term came to an end on August 27.
Article 225 (7) provides that Parliament may not approve or renew a decision to stop the transfer of funds unless the CoB has presented a report on the matter to Parliament. The affected entity, in this case, the 15 counties, must be given an opportunity to answer the allegations against them and to state their case before the relevant parliamentary committee.
But according to Ms Makau, the lack of a substantive CoB has complicated the matter, technically muzzling the Treasury request.
The counties are Narok, Machakos, Nairobi, Vihiga, Isiolo, Tana River, Migori, Tharaka-Nithi, Bomet, Kirinyaga, Nandi, Mombasa, Kiambu, Garissa and Baringo.