Senators have joined calls to transform the National Treasury into an independent office to end ‘unfairness’ witnessed in disbursement of funds to counties.
The MPs said clipping the powers of the national government over the Exchequer will go a long way in ensuring that both levels of government are treated as equals during distribution of funds raised from collected revenue.
Vihiga Senator Godfrey Osotsi said the obtaining situation has reduced governors into beggars as they have to queue at the National Treasury begging for funds from the Cabinet Secretary, who prioritises the national government.
“We need to have a conversation around this issue. Why should the national government be in full control of the National Treasury?” Mr Osotsi posed.
“This House has to do something about it in order for the National Treasury to have financial independence,” he added.
The senator argued that the national government is violating Article 225(1) of the Constitution which provides for the establishment, functions and responsibilities of the National Treasury.
Further, Article 225(2) states that Parliament shall enact legislation to ensure both expenditure control and transparency in all governments and establish mechanisms to ensure their implementation.
“We cannot have a Treasury prioritising the national government money and not the counties. Operations in counties have grounded largely because they have not received their disbursements from January. The national government is undermining the county governments,” he said.
Mombasa Senator Mohamed Faki supported Mr Osotsi’s sentiments, saying the National Treasury cannot be fair and independent when its head is appointed by the national government.
Therefore, he said, there must be an independent entity devoid of Executive control.
“The CS cannot be free to make independent decisions because he is appointed by the national government. We must push to have the Treasury transformed into an independent office in order to end the bias towards the counties,” said the senator.
The development comes just weeks after the Commission on Revenue Allocation (CRA) also called for having an independent Treasury, arguing that as currently established, the National Treasury functions largely as an entity of the national government.
CRA’s Director of Economic Affairs Lineth Oyugi said this has seen the National Treasury favouring ministries, departments and agencies at the expense of devolved units during the sharing of the national cake.
To cure this ‘unfairness’, she argued, it should be made an independent office similar to the office of the Auditor-General and Controller of Budget.
Ms Oyugi said before the 2010 Constitution, the National Treasury was an office under the Ministry of Finance but things changed afterwards.
She pointed out that in actualising Article 225(1) in the Public Finance Management (PFM) Act, Parliament erred in having Section 11 of the PFM Act talking of establishment of a Treasury for the national government.
The section states that there is established, pursuant to Article 225 of the Constitution, an entity of the national government to be known as the National Treasury.
Consequently, Ms Oyugi said Parliament needs to amend Section 11 of the PFM Act to be in line with the Constitution in terms of what kind of Treasury was envisioned.
She said it is time to have the Treasury stand alone as an independent office under the Ministry of Finance and Planning and not have the current Ministry of National Treasury and Economic Planning.
The Treasury currently owes counties at least Sh92 billion, which are outstanding disbursements for January, February and March.
Senate Majority Leader Aaron Cheruiyot said it is time to push the Treasury to create a devolution fund to act as a buffer for counties.
He said that the Exchequer can deposit in the Fund Sh200 billion which county governments can withdraw every month in order to end the challenges of delayed disbursements.
“This fund can help in creating a buffer of six months so that there is no time that the Treasury runs out of funds for counties,” said the Kericho senator.
“It makes no sense to see governors ride on big cars to launch projects in their counties yet they will not complete them due to financial constraints.”