This archive report was first published on 19 September 2019.
Published on September 19, 2019, a recent lesson has been unfolding on the impact of political elite indiscretions at the national level on county governments' financial operations.
Following the enactment and assent of the Division of Revenue Bill by President Uhuru Kenyatta, Treasury Cabinet Secretary Umaro Yatani announced the release of Sh50 billion to county governments. However, this money was supposed to have been disbursed in July and August.
County governments have been waiting for months for the funds to be released, even as senators and MPs haggle over the Division Revenue Bill. This has led to a strong case for introducing a system that allows counties to access a proportion of the money they are entitled to while waiting for the political elite to agree and approve the Division of Revenue Bill.
It may require amending the Public Financial Management Act to give county governments temporary legislative authority to access money from the Consolidated Fund and make it possible for them to run and provide services to citizens.
When disbursement to counties delays, it leads to accumulation of payment arrears, compounding the problem of huge pending bills. Large pending bills in a dysfunctional accounting system is a recipe for fake bills and corruption.
According to a recent report by the Auditor-General, the stock of county pending bills exceeded Sh100 billion as at the end of February this year, with Sh40.5 billion being eligible for immediate payment. Approximately 25 percent of the arrears were accounted for by unremitted taxes and other statutory deductions, a clear sign that counties are engaged in illegal activity.
The report also revealed that a good proportion of pending bills related to outstanding payments to the Kenya Medical Supplies Agency (KEMSA), a sorry state of affairs indeed because this is money to pay for delivery of drugs and medicines. How can we claim to have capacity to implement the Universal Health Coverage (UHC) programme when counties are unable to pay for drugs?
