Governors have opposed a proposal by treasury to slash the funds allocated for counties in this financial year in an effort to contain a financial constraint occasioned by a shortfall in revenue collection.
COG Chairman Governor Josphat Nanok, who was speaking at a press conference at the COG headquarters on Thursday, said that the plan by treasury to reduce county allocations will have serious implications on service delivery.
Nanok said the current financial situation at the counties was bad already as most counties did not receive the required 75% of the disbursements, which has paralyzed operations.
“Counties are facing a tight financial crisis three months to the end of the Financial Year 2017/18 as we have received about 33% of the expected 75% disbursements to date,” Nanok said.
Nanok further stated the plan is unconstitutional and will require an amendment of article 219 of the constitution before its implemented.
“The proposal has serious implication, requires amendment of: Article of Constitution; Division of Revenue Act 2017, County Allocation of Revenue Act 2017 &47 County Budgets- a lengthy process that’ll take at least two weeks at each stage with requirement of public participation,” Nanok said, adding that The Division of Revenue Act stipulates that the national government will bear the revenue shortfall.
“The Division of Revenue Act, Section 5, provides that the National Govt. will bear the revenue shortfall and in case of revenue over performance, it shall be accrued to the National Govt. This is because County Governments are yet to be given powers to borrow to augment budget gaps,” he said.
The governors asked the senate not to approve the the proposal by CS Rotich as it would greatly affect the activities and projects in the counties.
“The Council further recognizes the key role the senate plays in promoting devolution and protecting the interests of County Governments. We therefore appeal to the Senate to ensure that this proposal by National Treasury is negated,”
Treasury CS on Wednesday announced plans to slash the national budget by over Sh 80 million due to a shortfall in revenue collection. Rotich further revealed a plan to slash the cash allocated to counties by between Sh15 billion and Sh17 billion.