Counties in cash crisis as Govt delays disbursement

Tuesday October 03 2017
counties pic

National Treasury Cabinet Secretary Henry Rotich speaks to the press during the launch of the Sector Working Groups on September 15, 2017 at KICC. Governors have written to Mr Rotich decrying the delay in disbursement of funds. PHOTO | DIANA NGILA | NATION MEDIA GROUP


Counties are facing a major cash crunch following delay by the national government to remit disbursements to the devolved units for the last two months.

As a result, a number of them, according to the Council of Governors (CoG), are now reporting a disruption of essential services as well as non-payment of salaries to their staff.

The Public Finance Act 2012 mandates the National Treasury to disburse monies to the devolved units at the beginning of every month and in any event, not later than the 15th day from the commencement of the quarter.


The Act emphasises that the disbursement shall be done in accordance with a schedule prepared by Treasury in consultation with the Intergovernmental Budget and Economic Council.

This is to be done with the approval of the Senate and published in the Gazette, as approved, not later than May 30 every year.


On Tuesday, the CoG in a letter to Treasury Cabinet Secretary Henry Rotich, expressed its disappointment with the delays.


CoG chairman Josphat Nanok said due to the late approval of the schedule, attributed to transitional challenges, counties have been unable to receive their monthly disbursements dating back to July 27, when the 2017/18 financial year came into effect.

“It is on this premise that the CoG requests for the fast-tracking of the disbursements to all the 47 county governments,” Mr Nanok said in the letter.

“This will enable county governments to deliver the required services to Kenyans. As at now, most counties are reporting a disruption of essential services and non-payment of salaries,” he went on.


A spot check by the Nation revealed that Nakuru and Laikipia counties may have borrowed funds to pay employees September salaries.

And in Mombasa County, director of communication Richard Chacha said the implementation of some projects had stalled as a result of the cash crunch adding the county was now relying on collected revenue for survival.

“However, the implementation of essential services have not been affected as the Controller of Budget had given us the go-ahead to use revenues to pay our workers’ salaries,” Mr Chacha said.


A source at the Nakuru County government, who sought anonymity, said they had been assured that their salaries will be paid by Friday this week.

And in Bungoma and Uasin Gishu counties, the implementation of key projects have stalled.

READ: Counties’ revenue collection dips by Sh1.2bn, falls far below budget

READ: Governors face acute cash crisis

Bungoma Finance chief officer Chrispinus Barasa on Tuesday asked the Treasury to release the allocation to enable the county government to discharge its operations.

“We are stuck, there is no money in our accounts; employees are yet to be paid,” he said.


In Uasin Gishu, Governor Jackson Mandago petitioned the national government to release funds.

Governor Mandago said that failure to release funds to the counties had affected payments for emergency service delivery, development and workers.

“In this county, for instance, we have road equipment worth Sh634m that we acquired in the first tenure of office but they are currently grounded because we don’t have money to fuel them so that they can execute their mandate,” Mr Mandago said.

Critical services in Kisumu County have also been affected by the delay.

“[I] am told the issue is yet to be resolved for us to carry out services as planned,” deputy governor Mathews Owili said.


He indicated that apart from the nurses’ strike, they are worried about the supplies of medicine to the facilities.

Kisumu Speaker Onyango Oloo said the Assembly had been grounded due to lack of funds.

“We cannot even complete the induction of ward reps,” he said.


But in Nyandarua the situation was different, with County Finance executive Ammon Kinyanjui saying: “Treasury has been disbursing funds to our consolidated account.

"But we have had some little delay in disbursing the same to our respective accounts, but this has not affected service delivery.”

In Laikipia, county acting chief accounting officer Paul Njenga said the delayed disbursement had not affected their operations.

Additional reporting by Dennis Lubanga, Titus Oteba, Rushdie Oudia, Eric Matara, Waikwa Maina, Steve Njuguna, Mohammed Ahmed, Fadhili Fredrick and Brian Ocharo