The National Treasury failed to send more than Sh30 billion to counties during the fiscal year ending June 2024, underscoring the fiscal challenges it continued to face in a year that was marked by delays in releasing the equitable share of revenues.
By the end of the 2023–24 fiscal year on June 30, the Treasury had released Sh354.59 billion out of the budgeted Sh385.42 billion for the equitable share of revenue to counties, the latest data show.
The failure to release Sh30.83 billion saw the counties miss eight percent of their budgeted equitable share funds, which affected the implementation of planned programmes, with Nairobi, Nakuru, Turkana, and Kakamega foregoing more than Sh1 billion each.
“The County Allocation of Revenue Act (CARA) 2023 provided for equitable share allocation to counties of Sh385,424,616,067 to be disbursed directly by National Treasury,” Treasury notes in the statement of exchequer issues by the end of June 2024.
“The County Governments Additional Allocations Act, 2024, provided for additional allocations to county governments in FY2023/2024 amounting to Sh46,362,301,458.60 to be disbursed through the respective ministries, departments, and agencies,” Treasury notes in the statement of exchequer issues by end of June 2024.
The failure to release the funds to counties at the end of the financial year contravenes the Public Finance Management (PFM) Act, 2012, which requires the Treasury to send money to counties by the 15th of every month.
“The National Treasury shall, at the beginning of every quarter, and in any event not later than the fifteenth day from the commencement of the quarter, disburse monies to county governments,” the PFM Act, 2012, states.
Failure to send the Sh30.83 billion by the end of June saw a total of 35 counties fail to receive more than Sh500 million each, as their budgets were starved by eight percent on account of the equitable share shortfalls.
The Treasury did not release Sh1.6 billion to Nairobi, Sh1.08 billion to Nakuru, Sh1.05 billion to Turkana, and Sh1.03 billion to Kakamega. Other heavily hit counties in terms of absolute funds not released by the the end of June were Kiambu (Sh978 million), Kilifi (Sh968 million), Mandera (Sh930.6 million), Bungoma (Sh889 million), and Kitui (Sh866 million).
The Treasury had struggled with equitable share releases throughout the year. By the end of May 2024, the Treasury had not released Sh98.3 billion to the counties and had to fork out Sh67.4 billion in June alone, more than double the Sh29.5 billion average monthly releases from July 2023 to June 2024.
The failure to send all budgeted equitable share of revenues to counties by the end of the fiscal year is the first in two years after the Treasury also failed to release Sh29.6 billion in the 2021/22 financial year.
