Treasury CS Ukur Yattani has moved to Parliament with a view to stopping the release of funds to 15 counties for their failure to clear more than Ksh22.7 billion in debt owed to suppliers, key amongst them the Mombasa County.
In a report published by the Business Daily on Thursday, November 28, the speaker of the National Assembly asked Parliament to fast track the request to ensure that the CS’ move comes into effect as from December 2019 as he had sought.
Mombasa County director of communications, Richard Chacha, informed Kenyans.co.ke that they were privy to the move by the CS to cut off funds from the county.
“It is going to adversely affect our operations because we will have a big problem with running the county and pay salaries. We have a huge wage bill, and we cannot just pay all our bills in one go. We have to do it in a step-by-step manner to ensure a healthy financial flow in the government,” Chacha stated.
Chacha also revealed that they were in negotiations with the National Treasury and the affected businessmen to ensure that the looming stalemate is forestalled before it gets out of hand.
“It has not been easy to balance between development and recurrence. We have been grappling with all those challenges but we are committed to paying the suppliers,” he insisted.
Yattani’s decision is guided by the Public Finance Management (PFM) Act, 2012, which allows the Treasury to seek Parliament’s approval before the stoppage of transfers of an equitable share of revenue to the counties.
“Where the Cabinet Secretary makes a decision to stop the transfer of funds to a state organ or public entity in accordance with the Article 225 (3) of the constitution and provisions of the Act, the CS shall stop the payment and inform the Controller of Budget,” the PFM Act reads.
The Act also calls for the CS to also seek the approval of Parliament not later than seven days after the decision to stop the transfer of funds has been put into effect.
Some of the other counties targeted by the CS include Machakos, Migori, Nairobi, Vihiga, Baringo, Kirinyaga, Nandi and Kiambu counties.
Narok, Tana River, Isiolo, Garissa, Tharaka Nithi and Bomet Counties are also on CS Yattani’s crosshairs.