The Council of Governors has said that the Sh43.5 billion that was disbursed by the National Treasury to the county governments is not enough to clear pending bills.
In a statement on Thursday, the council’s Finance Chairperson Nderitu Muriithi said that the Treasury is yet to release funds for the month of May and June for the last financial year, which amounts to Sh58 billion.
Muriithi said that the balance for the last financial year would have been enough to facilitate seamless service delivery and payment of the pending bills.
“As such, the amount disbursed on Wednesday is not sufficient to clear all the pending bills and at the same time facilitate normal county operations,” Muriithi said.
He added that the amount that was released by the Treasury CS Ukur Yatani is the normal monthly allocation to counties meant to facilitate service delivery to the citizens.
Muriithi added that following the delayed disbursement, counties owe employees salaries ranging from the month of March to date.
“Therefore, a good proportion of these funds will be utilised for payment of salary arrears and statutory deductions to KRA, NHIF NSSF.”
He further said that the perennial delay in disbursement of funds is costing the Citizen services by County Governments, development expenditure absorption rate and that counties have been operating on a commercial loan, which is expensive.
On Wednesday, while confirming the release of the funds, the CS said that the Treasury will prioritise clearing of the owed dues for the months of May and June 2021 to continue the improved economic performance.
Yatani had asked counties to prioritise payment of pending bills owed to their suppliers and their statutory dues.
"The payment of these pending bills will be closely monitored and future transfers weighed against the fulfillment of this important obligation to the private sector," Yatani said.
While presenting the Budget for the year 2021-2022 before the National Assembly, the CS said that the Treasury will stop the transfer of cash to agencies that will not comply with the directive.
"Government ministries, departments, and counties directed to clear pending bills by June 30. To enforce compliance, Treasury will stop cash transfers to counties that don't comply with the directive... MPs urged to support the proposal," he said.
