The National Treasury has once again been accused of undermining devolution after failing to release funds for counties on time.
Nearly four months into the start of the financial year, the county governments are yet to receive development funds.
A look at the transactions at the National Treasury show that the development module on the Integrated Financial Management Information System (Ifmis) is yet to be activated.
Ideally, the module should have been up and running by August or latest September but if the delay persists, the devolved units will not receive the funds by December, posing absorption challenges.
It is unlikely that the counties will receive the funds this year considering that only two months remain, a move that will delay or stall the implementation of projects and exert pressure for the absorption of the funds within the budget plans.
STRAINED
The delay is also likely to get the counties on the wrong side with contractors and suppliers, who are likely to blacklist them over delays in meeting their financial obligations.
According to the Division of Revenue Act, 2018, the 47 county governments were allocated Sh372 billion by the national government.
About Sh314 billion of the vertical allocation is in equitable share and the balance in conditional grants from the national government and other development partners.
A governor, who did not want to go on record, said that the counties are “literally surviving” and that the delayed disbursement will be complicated by the “usually” tedious procurement regime when the funds are finally released.
“It is really a serious challenge and we may not accomplish what we meant to achieve this financial year. We are only getting money to pay salaries for staff and nothing more,” the county boss said.
Treasury Cabinet Secretary Henry Rotich is by law required to disburse monthly funds as a block to the county revenue fund held at the Central Bank of Kenya in Nairobi.
BLACKLIST
On Saturday, Mr Rotich dismissed claims that funds have delayed, noting “we do not separate between recurrent and development expenditures”.
However, Makueni Senator Mutula Kilonzo Jnr accused Mr Rotich of violating the constitution and described the delay “a crisis of monumental proportions”.
“The counties will grind to a halt and no one will agree to engage with them because of their bad credit rating,” Mr Kilonzo said.
The County Allocation of Revenue Act, 2018, details the horizontal formula of sharing the funds among the counties and depending on how much each county gets, they have an obligation to set aside at least 30 percent of their budgets for development expenditure in line with the international standards.
According to the Controller of Budget Agnes Odhiambo, 14 counties – among them Kirinyaga, Kisumu, Nakuru, Garissa, Meru, Nandi and Embu – did not incur any expenditure on development during the first half of the 2017/18 financial year.