The Council of Governors has denied reports that counties have lost Sh40 billion in grants after Parliament removed the allocation from the revenue bill.
“The council wishes to set the record straight that county governments are not losing any funds,” CoG chairman Martin Wambora (Embu) said.
On Wednesday, the National Assembly approved an amendment by the Senate to the Division of Revenue Bill, 2021.
Division of Revenue Bill is crucial as it paves the way for the Appropriations Bill.
The amendment deleted a schedule detailing the disbursement of donor cash and conditional grants to counties.
The legislators expunged from the bill references to the conditional grants –among them donor funds – of about Sh40 billion.
They deleted provisions for Sh7.5 billion for leasing medical equipment and supplementary funds for construction of county headquarters.
The Senate also expunged provisions for conditional allocations – loans and grants of Sh32.34 billion – monies that lack a clear framework for disbursement.
Senators recommended a special legal instrument be created for disbursement of the Sh40 billion.
In a statement on Thursday, Wambora said the decision to expunge the grants from the bill does not mean counties have lost the cash.
The chairman reckoned that Parliament’s decision is in line with the High Court ruling that the Division of Revenue Act and the County Allocation of Revenue Act, 2021, shall exclude grants.
The court had ruled that only four items – the total sharable revenue amounting to Sh1.7 trillion, national government share (Sh1.4 trillion), the Equalisation Fund (Sh6.8 billion) and the county equitable share (Sh370 billion) – should be captured in the bill.
“The transfer of conditional grants amounting to Sh39.9 billion, Sh7.5 billion from the government of Kenya and Sh32.3 billion conditional allocation from loans and grants,” Wambora said.
He said that according to the ruling, grants should be facilitated through a different legal framework in line with Article 190.
Wambora disclosed that a technical committee chaired by the National Treasury has been formed and is working on the new law.
“The legal instrument, which is currently being developed, will be consistent with the aforementioned judgment and it will clarify the framework for the management, control and accounting for conditional and unconditional grants,” he said.
Edited by A.N