Relief for counties as High Court deal frees funds

Fears of county governments
running dry on funds were eased
on Friday after the Controller of
Budget agreed to release the
money immediately.
The deal was sealed in the High
Court by lawyers representing
Members of County Assemblies,
the Commission on Revenue
Allocation and the Controller of
Budget. Mr Justice Isaac Lenaola
witnessed the signing of the
consent which allowed the county
governments to withdraw half of
their budgets.
According to the consent order,
Controller of Budget Agnes
Odhiambo is to release 50 per cent
of budget estimates for each of the
47 counties budget estimates for
2014/2015 Financial Year, pending
hearing and determination of the
petition.
“The funds must be released
immediately to counties as per
section 134 of the Public Finance
Management Act in respect to
County Budget Estimates for the
2014/2015 financial year,” reads
the order.
Justice Lenaola directed the CRA
and the Controller of Budget to file
their responses before the hearing
of the petition on August 29.
The development is a big relief to
county governments which had
warned that their operations may
grind to a halt if the funds are not
released in the next seven days.
MCAs from all the 47 counties
challenged a directive by the
Commission on Revenue Allocation
curtailing their spending of billions
of shillings.
Their lawyer, Prof Tom Ojienda,
submitted that CRA and the
Controller of Budget contravened
the Constitution as they had no
authority to direct how counties
spent the funds.
“The mandate of CRA is only to
recommend the basis for equitable
sharing of revenue raised by the
National Government to the
devolved governments.
“The Controller of Budget is only
mandated to ensure the funds are
released and has no mandate
deciding how the assemblies will
use them,” Prof Ojienda said.
Last month, CRA issued a directive
on budget ceilings to restrict
spending by MCAs and assemblies
following an outcry over wastage
of public funds through allowances
and foreign trips.
Under the new ceiling, the total
cost for funding new structures
under devolved units should not
exceed Sh13 billion of the total
amount allocated per year for the
executives and Sh17 billion for the
assemblies.
Curb misuse
The ceilings provided a limit of
spending by county executives and
county assemblies in a move meant
to curb misuse of resources and
cut down unnecessary recruitment
at the county governments.
The suit seeks orders suspending
the circular issued by the CRA and
an order compelling the Controller
of Budget to release county funds
as per the 2014/2015 budgetary
allocation for county governments.