County governments have endured the first two months of the 2024/25 financial year without fresh exchequer funding, as Parliament drags the legislation of a framework to anchor fresh disbursements to the devolved units.
Counties are yet to receive new releases from the National Treasury save for Sh30.8 billion in carry-over arrears from the 2023/24 fiscal year according to data from the statement of actual revenues and net exchequer issues as of August 30, which was published on Friday.
The withdrawal of the Finance Bill, 2024 forced the National Treasury into resubmitting the County Allocation of Revenue Bill, 2024 to Parliament for fresh consideration.
The National Assembly and the Senate are yet to reconsider the bill with MPs for instance having been on a month-long recess until last week.
“The initial allocation to counties with respect to equitable share amounted to Sh400.1 billion. Following the withdrawal of the Finance Bill, 2024, the County Allocation of Revenue Bill, 2024 was resubmitted to Parliament with equitable share of Sh380 billion,” the National Treasury said.
Counties are now expected to receive the Sh380 billion share of the national cake in the current financial year, excluding the Sh30.8 billion in arrears for the year ended June 30.
The devolved units are meanwhile set to receive a further Sh55.4 billion once the County Governments Additional Allocations Bill, 2024 is passed.
The additional allocations are expected to lift total disbursements to counties to Sh410.8 billion –excluding the Sh55.4 billion– up to June 30, 2025.
Both the county allocation of revenue and county governments additional allocations bills are under consideration by Parliament.
The lack of new disbursements has left counties in a crisis as many fail to honour payment to workers and suppliers.
The National Treasury had been expected to disburse Sh100 billion to counties in the first quarter of the 2024/25 financial year to the end of September.
The Council of Governors (CoG) recently wrote to the Senate’s Finance Committee raising concerns over the delayed disbursements and the impact on the operations of the devolved units.
Several counties including Busia failed to pay August salaries citing delays in the exchequer disbursements. Other counties whose workers have faced delays in salaries include Kiambu and Meru.
The CoG is pushing to access funding through a provision in the Public Finance Management Act, 2012 which allows the Controller of Budget (CoB) to approve withdrawals of up to half of the previous year’s equitable share from the consolidated fund.
This, in the absence of a County Allocation of Revenue Act.
Delays in disbursements to counties is also attributable to revenue underperformance which has resulted in unfunded expenditures in the prior fiscal year.
The government for instance fell short of its revenue target in the fiscal year to June 2024 by Sh204.9 billion resulting in the Sh30.8 billion undisbursed amounts to counties. The carryover expenditures have also included recurrent budgets due to ministries and state departments and pensions/gratuities.
