Counties are facing a severe cash crunch and will not pay salaries or for supplies. This is after National Treasury failed to disburse KSh105.9 billion to the devolved units, a month before the 2020/21 financial year ends.
Governors have warned that this delay has compromised the ability of counties to respond to the pandemic, clear pending bills or pay salaries.
According to Embu Governor and Council of Governors Chairman Martin Wambora, the current outstanding amount owed to County Governments is KSh105.9 billion.
Counties blame transport sector
Counties have pointed fingers at the transport sector for the fast spread of the COVID-19 virus, derailing efforts by the regional governments to combat the virus.
Wambora appealed to Treasury to release funds to counties immediately.
Available data from Treasury shows that counties had by April 30 received KSh239.8 billion of KSh383.6 billion owed, leaving a balance of KSh144 billion in the current financial year.
CoG figures show that KSh242.6 billion had been released to counties by May 26, leaving an outstanding KSh105.9 billion.
Of this amount, the Treasury owes Nairobi County KSh3.5 billion as arrears for 2019/2020 and another KSh3.9 billion for January and February.
This despite reported improvements in revenue collections by Kenya Revenue Authority(KRA), increased compliance and successful debt recovery initiatives.
In April, the Kenya Revenue Authority (KRA) collected KSh32.6 billion more or 22.63 per cent in taxes and levies compared with a year ago.
Revenue receipts in April amounted to KSh176.66 billion compared with KSh144.06 billion in April 2020.
This marked the fifth consecutive month that the taxman has outperformed monthly goals.
County Governors have repeatedly blamed delayed disbursements for their woes that include crippling industrial actions and dead projects.