Treasury asked to pardon 15 counties over pending bills
The office of the Controller of Budget (CoB) has asked National Treasury to pardon at least 15 counties at risk of being denied their equitable share of allocation after failure to settle pending bills.
In a circular dated November 19, 2019, Acting Treasury Cabinet Secretary Ukur Yatani threatened to invoke section 97 of the Public Finance Management Act, 2012 to stop further transfers of equitable share of the revenue for the financial year 2019/20 to affected county governments with effect from December 1.
Yatani said the targeted devolved units were in material breach of section 94 of the PFMA Act as they had not made any significant effort to clear pending bills between July and October this year.
But appearing before the Senate Committee on Finance and Budget, Deputy Controller of Budget Stephen Masha reported that since the directive by National Treasury for the counties to clear their pending bills, only Baringo County had complied.
According to CoB, the county had reported the Sh31.6 million pending bills as verified by the office of the Auditor General had been settled as of November 30. Masha said more counties had made “significant progress” to settle their bills.
“The decision taken by Treasury CS was material breach. If we analyse the progress made since the directive and based on the data provided, we can reach a determination that significant progress has been made,” he said, adding: “Indeed, a couple of counties has made some progress when we look at the situation county per county basis. The question to be answered is what constitutes a serious material breach.”
The CoB has recommended to Treasury that the affected counties be permitted to develop a comprehensive and realistic pending bills repayment plan in line with recovery plan contemplated under Section 99 of Finance Management Act.
“The repayment plan should be discussed and agreed on between the National Treasury and the relevant county officials to ensure that all pending bills are paid as per the agreed plan,” Masha told the Mandera Senator Mahamud Mohamed–led committee.