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CRA faults Treasury on slashed county budgets

The Commission on Revenue Allocation (CRA) has faulted the National Treasury for slashing allocations to counties despite registered growth in the economy. The Treasury has allocated counties an equitable share of revenue of Sh310 billion in 2019/20 financial year, which is equivalent to 2.7 percent of GDP. This is compared to Sh314 billion or three percent of GDP in the current year and 4.6 allocated in the 2014/15 financial year.Kenya’s economy is projected to expand 6.2 percent in 2019/20, a slight improvement from the 6.1 anticipated in the current financial year. “In the proposed budget, the equitable share to counties is 2.7 percent of the GDP meaning that the devolved units are not feeling growth in the country’s economy. In fact the higher the growth in economy, the less counties receive,” CRA chairperson Jane Kiringai told the Senate Finance Committee last week.The law — which sets a minimum of 15 percent of revenues raised nationally — however permits the Treasury to base allocation to counties on last audited revenue accounts approved by Parliament. The House has been accused of dragging its feet in approving the accounts with the current fiscal year’s allocation being based on government expenditure data of five years back.Dr Kiringai said the declining allocations to counties, delayed Exchequer disbursements and that underperforming revenue at the devolved units was a cause for concern.The delayed exchequer releases and poor own-revenue collections have been blamed for the struggle counties go through to meet their obligations in good time, leading to swelling pending bills.As of June 30, 2018, the bills had accumulated to Sh108.41 billion, with Controller of Budget Agnes Odhiambo attributing it partly to delayed disbursements by the Treasury.The delays have led to projects stalling, late workers’ salaries and frozen payments to suppliers, slowing down operations.

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