Counties to wait longer for cash despite unlocked impasse

County governments will wait a little longer before they get cash despite the Senate unlocking the revenue stalemate that resulted in a crisis in the devolved units.

A lengthy approval process awaits the formula before the National Treasury gets the legal basis to disburse the Sh316.5 billion allocated this financial year.

Senators on Thursday approved Sh370 billion to be disbursed to counties based on the new formula, starting next financial year.

Public participation on the third basis formula, which is before the Budget and Appropriations Committee, is set to be concluded on Tuesday.

The committee is expected to consider the views from the public before it issues a report to be debated in the chamber.

After the National Assembly passes the formula, it will communicate to the Senate which will then pass the County Allocation of Revenue Bill, 2020.

The Bill is prepared alongside the disbursement schedule before the instruments are assented to by President Uhuru Kenyatta.

The County Allocation of Revenue Act (CARA) will thus give Treasury Cabinet Secretary Ukur Yatani the authority to disburse money to counties.

The Senate voted on all the amendments to CARA but did not take a final vote pending the National Assembly’s determination on the formula.

Senators’ final vote can only be taken after the National Assembly approves the formula which has generated a lot of political heat.

Senators will also be required to send CARA to the National Assembly for concurrence before the entire county cash instruments are assented to.

The National Assembly is likely to approve the third basis for allocation on Thursday evening.

For the duration of the operation of the Third Basis, no county shall receive an amount of shareable revenue that is less than the amount for financial year 2019-20.

The earliest the devolved units – most of which have shut down key services - can get money is in the first week of October.

Committee vice-chair Moses Lessonet told the Star on Monday that the committee has no reason to further deny counties money.

In what may be a reprieve to governors, anyone seeking to amend the formula as approved by the Senate would require two-thirds’ support.

Lessonet said they have no reports of persons desiring to raise the two-thirds to defeat the Senate’s proposal.

“The formula is just coming to the National Assembly to ventilate and approve it,” the Eldama Ravine MP said.

“Once we agree, the Senate will get an opportunity to pass CARA which will also have to be approved by the National Assembly. We are committed to approving it as soon as possible, he said.

Pressure has been piling on the Treasury to release 50 per cent of the share of revenue on the basis of the Supreme Court advisory on the same.

Yatani on Friday said in the absence of any appropriation law that gives it powers to disburse money, his hands are tied. 

“Funds from the Consolidated Fund cannot be disbursed in absence of any written law,” the CS said.

Yatani said they were waiting for the presidential assent to the legislative instruments to disburse Sh60 billion to the counties.

Makueni Senator Mutula Kilonzo Jr said, “CARA must be accompanied by the formula. We did not want to make assumptions that the NA will pass the formula.

“The failure to pass CARA was deliberate. Once the National Assembly concluded the public participation and passes the formula, we will come back and take the final vote," the lawmaker said.

Counties are set to get Sh316.5 billion in equitable share of national revenue and a conditional allocation of Sh53.4 billion.

Budget experts say counties should get more than the Sh316.5 billion, factoring in the rate at which national revenue has been increasing over the years.

In its review of the 2020-21 budget, the Parliamentary Budget Office holds that counties may be getting what is available rather than what they need.

Edited by R.Wamochie