Acting Treasury Cabinet Secretary Ukur Yattani has asked Members of Parliament to approve his decision to deny at least 15 counties their equitable share of allocation for failing to pay their pending bills.
In a communication to MPs, National Assembly Speaker Justin Muturi on Wednesday said he had received CS Yattani’s request to stop transfer of equitable share of the revenue for the financial year 2019/2020 to the affected counties.
“Honorable Members, pursuant to the provisions of section 97(2) of the Public Finance Management Act, 2012, the acting Cabinet Secretary is seeking approval of the House for stoppage of transfer to fifteen (15) county governments as contained in Circular No.20/2019 dated 19th November 2019,” said Muturi.
He added: “…the CS has noted that the fifteen (15) county governments have contravened section 94(1)(a) of the Public Finance Management Act, 2012 by failing to make any efforts at clearing eligible pending bills, thus affecting economic growth and inconveniencing Small and Micro-Enterprises (SMEs) and other business segments at the county level,”
Last week, CS Yattani said that while some 20 counties have demonstrated efforts to pay pending bills, the said counties have persistently failed to pay for goods and services provided by firms in the private sector, including SMEs.
As a result, he said, effective December 1 the transfers for the 2019/2010 financial year and the transfer of conditional grants will be stopped.
“With regard to the county governments, a special audit by the office of the Auditor-General (OAG) sometimes in 2018 verified and approved payments of an amount of Sh51.2 billion out of a total Sh88.98 billion pending bills presented for audit, while a total of Sh37.7 billion were to be reviewed further subject to production of full documentation in support of the claim,” the CS stated in Circular No.20/2019 dated 19th November 2019.
“It’s important to note that these pending bills were for the period after the roll-out of the devolved system of government and therefore do not include pending bills accumulated by the defunct local authorities,” Yatani said.
Speaker Muturi has referred the matter to the Budget and Appropriations Committee that is chaired by Kikuyu MP Kimani Ichung’wah (Kikuyu) for consideration.
Nevertheless, the Speaker observed that the CS has complied with the provisions of section 97(2) of the Public Finance Management Act by seeking Parliament’s approval of the stoppage within seven days.
The counties which as at October 28 owed suppliers are: Migori (Sh970 million), Tharaka Nithi (Sh921 billion), Bomet (Sh893 million), Kirinyaga (Sh1.05 billion), Nandi (Sh1.12 billion), Mombasa (Sh4.07 billion), Kiambu (Sh1.56 billion), Garissa (Sh1.57 billion), and Baringo (Sh35 million).
Others are Narok Sh1.8 billion, Machakos (Sh1.1 billion), Nairobi (Sh21 billion), Vihiga (Sh1.8 billion), Isiolo (Sh1.09 billion), and Tana River (Sh1.09 billion).
The affected counties have up to December 1 to comply with the directive, failure to which their monies would be locked as stipulated in Section 97 of the Public Finance Management Act (PFMA).