What you need to know:
- Counties usually receive their equitable share on the 15th day of the month
- According to the Public Finance Management Act, which governs the management of public resources, county funds can only be released from the Consolidated Funds Services to the CRF after gazetting Cara.
The 47 county governments start receiving their Sh369.87 billion from the national government today. The money is in equitable share and conditional grants for financial year 2020/21.
According to the County Allocation of Revenue Act (Cara), the devolved units will receive Sh79.126 billion that was due to them in the first three months — July (Sh25.32 billion), August (Sh26.903 billion) and September (Sh26.903 billion ) — but delayed as the Senate haggled over the enactment of the third generation formula. For October, counties will get Sh25.32 billion.
Counties usually receive their equitable share on the 15th day of the month, but the Senate amended the County Allocation of Revenue Bill (Carb), which President Kenyatta signed into law last Thursday, so they can access what was due to them during the first quarter of the year in lump sum.
This means that, on the 15th of this month, their accounts will be credited with another Sh25.32 billion, which was scheduled for October.
However, to get the cash, counties will need to submit their requisition forms with Controller of Budget Margaret Nyakang’o explaining their expenditure plans for the period.
Dr Nyakang’o told the Nation that counties will start receiving their billions today after the Cara was officially gazetted.
“I’ve just received the soft copy of the gazetted Cara from the Government Printer... Depending on the working hours of the Central Bank of Kenya (CBK) staff, the money should reflect in the County Revenue Fund (CRF) before close of business on Tuesday [today].”
The third-generation formula, according to Article 217 (1) of the Constitution, will be in force for the five years starting from the 2021/22 financial year as the second-generation formula was extended to cover another year on top of the three required under Schedule Six of the Constitution.
According to the Public Finance Management (PFM) Act, which governs the management of public resources, county funds can only be released from the Consolidated Funds Services (CFS) to the CRF after gazetting Cara.
The gazettement, with the National Treasury’s authority, allows Central Bank to electronically credit the amounts to the CRF. Both CFS and CRF are domiciled at the CBK.
For the counties to withdraw from their revenue account at the CBK, however, another financial bureaucracy issue must be complied with.
“The requisitions made by the counties must come to the CoB for approval first before they can access the funds,” said Dr Nyakang’o, noting that, with the Covid-19 pandemic, it will be a challenge to her and her staff as the requisition forms must be submitted in hard copies and signed manually. By yesterday, her office was yet to start receiving the requisitions from the counties.
The enactment of Cara came after Parliament passed the third generation formula that gives parameters for sharing the funds. Of the Sh369.87 billion allocated, Sh316.5 billion is in equitable share from the national government.
Others include Sh13.73 billion in grants from the government, Sh9.43 billion from the Road Maintenance and Fuel Levy. Loans and grants from development partners account for Sh30.2 billion.
The Sh13.73 billion in government grants includes Sh6.21 billion for lease of the controversial medical equipment, and Sh4.33 billion for 11 Level Five hospitals.
There is also Sh2 billion for the rehabilitation of youth polytechnics, Sh900 million as compensation for user fees forgone and Sh300 million for building county headquarters.
The imminent release of funds to the counties could not have come at a better time as services faced the threat of grinding to a halt. Twice, Council of Governors Chairman Wycliffe Oparanya announced counties’ shutdown.
On October 5, the Kakamega governor said the delays had complicated the situation. The signing into law of Cara paved the way for the passage by the Senate of the cash disbursement schedule last Thursday. The schedule indicates the amount each county is to receive monthly.