Treasury, Senate threaten funding cuts over counties’ financial mismanagement
The Senate committee, chaired by Homa Bay Senator Moses Kajwang’, is compiling a list of counties with glaring irregularities to submit to the Treasury, recommending a freeze on their funding.
The National Treasury and the Senate have revealed plans to block funding to counties repeatedly accused of mismanaging public finances, in a move likely to spark confrontation with devolved units.
The proposal targets counties with persistent breaches of financial rules, mounting debts, bloated payrolls, and poor audit records.
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During a meeting in Parliament on Thursday, Treasury Cabinet Secretary John Mbadi and the Senate’s County Public Accounts Committee (CPAC) agreed to take punitive action against counties that ignore financial regulations.
“I agree, a lot of what is happening in counties needs to be punished. At times, a reprimand is necessary. Some of it is outright misbehaviour on the part of county governments,” Mbadi said.
The Senate committee, chaired by Homa Bay Senator Moses Kajwang’, is compiling a list of counties with glaring irregularities to submit to the Treasury, recommending a freeze on their funding.
The focus is on counties burdened with huge pending bills, rampant corruption, repeated adverse or disclaimer audit opinions, and wage bills consuming more than half of their revenue.
“You’ll find a county where the wage bill is over 50 per cent. It has an adverse audit opinion or disclaimer and faces serious issues in procurement and financial management,” Kajwang’ said.
Article 225 of the Constitution allows the Treasury CS to stop transferring funds to a state organ or public entity under certain circumstances, including persistent breaches of financial regulations.
However, such a suspension cannot exceed 50 per cent of the county’s allocation and must not last more than 60 days.
Kajwang’ said the law requires counties whose funds have been withheld to prepare a financial recovery plan.
“Sometimes, that is what these counties need because the primary oversight has completely died,” he noted.
“In the Senate, we are morticians and yet the public will tell me I’m not correcting the county government, yet that is the primary responsibility of the county assembly,” he added.
The Senator singled out Nairobi and Mombasa as examples of counties drowning in debt, with pending bills surpassing Sh100 billion and Sh28 billion, respectively.
“Perhaps the public’s frustration with government stems from incompetence and inefficiency at the county level,” he said. “What’s your position? Because we in the Senate would wish to halt funding to some counties, but the constitution gives that mandate to you.”
Mbadi agreed that financial management in counties is alarming and requires decisive measures to restore discipline.
“You find counties requisitioning funds to pay for one item and redirecting the money elsewhere without explanation, leaving some bills unpaid for too long. This needs to be addressed,” he said.
However, he cautioned against rushing into halting funding, saying the constitutional provision should be used sparingly. “My understanding of Article 225 is that it should be exercised as a last resort, and with extreme care,” he said.
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