The Senate is this week set to debate the County Government Cash Disbursement Schedule for the 2023/24 Financial Year, setting stage for the transfer of funds to county governments in the new financial year.
The House is expected to consider the matter after it received a letter from Treasury Cabinet Secretary Njuguna Ndungu transmitting the draft Disbursement Schedule to the House in accordance with Section 17 of the Public Finance management (PFM) Act.
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“Pursuant to the Public Finance Management Act, the Schedule is supposed to be approved not later than May 30 every year,” Prof Ndungu said in a letter to the Clerk of the Senate Jeremiah Nyegenye.
“The purpose of this letter is to forward to you the Schedule for the 2023/24 financial year for your consideration. Your prompt attention to this matter will be highly appreciated,” the CS added.
The Senate, which had been in recess, will now be in a race against time to consider the matter as lawmakers try to catch up with the deadline required to approve the Schedule.
The House is already behind schedule in terms of considering the Schedule whose purpose is to ensure timely monthly transfers of funds from the Consolidated Fund to the respective County Revenue Fund of the 47 counties.
The Schedule is the key financial tool that operationalises the transfer of approved allocation to the 47 county governments.
Once the Schedule is tabled in the House, it will be committed to the Committee on Finance and Budget in line with the provision of Standing Order 183 (2) which is expected to report back to the House.
Article 218 of the Constitution provides for the enactment of two financial Bills annually – the Division of Revenue Bill and County Allocation of Revenue Bill.
Section 17 (6) of the PFM Act provides that the National Treasury shall at the beginning of every month, not later than the 15th day from the commencement of the month, disburse monies to county governments for the expenditure of the following month on the basis of the Schedule.
Section 17 (7) of the PFM Act provides that the Schedule should be approved not later than May 30 of every financial year.
This means the House is already behind schedule by over one and half months. However, Standing Order 183 of the House rules provide that the National Treasury should submit the Schedule no later than 15 days following the enactment of the County Allocation of Revenue Bill.
The schedule must be prepared with the approval of Intergovernmental Budget and Economic Council (IBEC), chaired by Deputy President Rigathi Gachagua, approved by the Senate and published in the Kenya Gazette not later than May 30 every year.
The figures in the Schedule are in line with the allocation of Sh385.4 billion provided for in the County Allocation of Revenue Act, 2023 for disbursement to 47 county governments using the third basis formula approved by the Senate in September 2020.
The disbursements will be made from the Consolidated Fund to the County Revenue Fund on the 15th day of every month based on performance of revenue raised nationally.
The Schedule contains Sh385.4 billion which was appropriated by the County Allocation of Revenue Act, signed into law by President William Ruto early this month.
The Schedule is developed by dividing allocation due to each county in the Act by the 12 months in a financial year even though the National Treasury maintains that disbursement will be based on the performance of revenue raised nationally by the national government.
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