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Late cash release delays salaries for county workers

Public servants in all 47 counties will have to wait longer for their salaries, as governors said they were unable to meet their financial obligations because the National Treasury had delayed releasing Sh30 billion expected in January.

In a letter to Mr Henry Rotich, the Cabinet Secretary for the National Treasury, Mr Isaac Ruto, who chairs the Council of Governors, protested over the delay and said the move would cause staff discontent against county governments.

“Despite our efforts to have the matter resolved, the counties continue to face the challenge of late disbursement, meaning that the National Treasury has consistently failed to take into consideration the council’s request of timely investment,” Mr Ruto said in a letter dated March 5.

He accused the national government of going against an earlier agreement requiring that disbursement to counties be done latest by January 15.

In February, no disbursements were made, forcing counties to suspend expenditures on development and other none-essential supplies.

“The National Treasury has since indicated persistent material breach of Section 94 (a)(e) of the PFM Act due to failures to make payments when due,” Mr Ruto’s letter said and warned that some projects would grind to a halt unless the money is released.

PAYMENT OF SALARY

“This has greatly impacted on payment of salary for staff that have commitments including standing orders for loans. Further, the continued delay will impact on the overall spending for counties,” said the letter.

“The council, therefore, protests the failure of the National Treasury to undertake its mandate as required and requests that you take this matter seriously and resolve it forthwith to avoid a situation of legal tussles.”

On Sunday, Mr Rotich said he was yet to receive the letter because he had been away in Rwanda on official business. He was expected back in the country on Sunday and said he would take up the matter.

By January, the National Treasury had released 57.3 per cent of the entire 2014/2015 budget for counties, with six months to the end of the financial year.

Last week, governors differed with Mr Rotich over the revision of the County Allocation of Revenue Bill, when the CS said the National Treasury would remove Sh4.5 billion set aside for leasing of hospital equipment from their watch.

The amount is this year’s share of  Sh38 billion to be spent progressively to lease medical equipment under a long-term project initiated by the national government. Governors had criticised the spending plan, saying they were not involved in the negotiations.

A revised County Allocation of Revenue Bill, 2015, has transferred the Sh4.5 billion to the national government, sparking a dispute between the governors and the National Treasury.

COUNTY FUNDS

The procurement of the equipment was carried out by the Ministry of Health, leading governors to boycott the launch presided over by President Uhuru Kenyatta at State House, last month.

Initially, the National Treasury had indicated that Sh1.9 billion had been allocated for the programme. However, the sum was later revised to Sh4.5 billion in the new County Allocation of Revenue Bill, 2015.

Mr Rotich also said that Sh4.6 billion meant for maternal health — which was financed through the Ministry of Health — would also now be channeled through the National Hospital Insurance Fund.

However, Mr Ruto has insisted that health was a devolved function and that resources associated with it should be channeled through county governments.

“The council maintains that these are county funds for county functions and should be transferred and accessed to the respective County Revenue Funds from the National Treasury without being administered by the principal secretary through Ministry of Health,” Mr Ruto said in a letter to Mr Rotich.

The Council of Governors’ chairman accused the Treasury of going against the Intergovernmental Budget Executive Council meeting agreement, which was reached on February 11 and which increased allocation to counties in the next financial year from Sh253 billion to Sh258 billion.