• The devolved units have been waiting for 10 years now for the operationalisation of the Fund.
• Senators have introduced a raft of amendments to a Bill from the sister house, triggering a mediation process which will take longer to conclude.
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The fourteen marginalised counties identified to benefit from the Equalisation Fund will wait longer for the cash meant to improve their infrastructure and social services.
This is after senators clashed with members of the National Assembly over the Equalisation Fund Bill, 2019 that is meant to operationalise the Fund.
Senators have introduced a raft of amendments to Bill from the sister house, triggering a mediation process which will take longer to conclude.
“The committee recommends that the Bill be approved with amendments,” reads a report by the Senate Finance and Budget Committee that scrutinised the Bill from the National Assembly.
The devolved units have been waiting for 10 years now for the operationalisation of the Fund because of delay by Parliament to pass legislation to guide its management.
The Equalisation Fund Bill, 2019 seeks to operationalise Article 204 of the Constitution which established the Equalisation Fund into which 0.5 per cent of all revenue is deposited.
Once enacted, the Treasury will unlock the Fund for the marginalised counties. The amount has since accumulated to Sh26 billion since the enacted of the Constitution in 2010.
Already, Treasury CS Ukur Yatani has published the regulations for administering the Fund pending the approval by Parliament.
The Fund beneficiaries are Garissa, Isiolo, Kilifi, Kwale, Lamu, Mandera, Marsabit, Narok, Samburu, Tana River, Turkana, Taita Taveta, Wajir, and West Pokot counties.
The Fund was aimed at providing basic services including water, roads, health facilities and electricity to marginalised areas to the extent necessary to bring the quality of those services in those areas to the level generally enjoyed by the rest of the nation.
In the amendments proposed by the Senate Committee, and are awaiting approval of the House, the team has amended the composition of the Board responsible for managing the fund.
According to the committee, the Equalisation Fund Board should be composed of Treasury PS, who shall be its chairperson, with PS in charge of devolution, two persons nominated by the council of governors, CRA chairperson and two people appointed by Treasury CS being its members.
This is in sharp contrast to the version passed by the National assembly which stated that the membership of the Board should be made up of a chairperson who is appointed by the President with the approval of the National Assembly.
PSs in charge of Water, Roads, Health, Treasury, Arid and Semi-Arid, four persons appointed by Treasury CS and the board’s CEO.
The senators also introduced a new clause to separate the roles of the Board from that of the administrator of the fund.
The Board, according to the committee, will among others advise Treasury CS on the distribution of resources to the marginalised areas, consider and approve projects, oversee implementation of projects in consultation with county governments.
On the other hand, the fund administrator, will open and operate account and CBK, disburse monies related to approved budgets and keep accounting books in relations to the operation of the fund.
The senators also scrapped the creation of local equalization fund committees in every constituency in a marginalised area to assist the Board in the identification of the projects as entailed in the Bill from the National Assembly.
“To ensure the administrative costs are minimal costs are minimal, there is a need to use already established administrative structures in identification and implementation of the projects,” reads the report by the report.
The committee proposed that county executive member in charge of finance shall be responsible for identifying projects to be funded by the Fund to cut operational costs.