WHY THE DELAYS IN CASH FLOWS TO COUNTIES
Last week, the International Budget Partnership (IBP) presented their findings on fiscal performance of national and county governments in Kenya. They focused on cash flows to counties.
They pointed out that there is a huge data gap that bars objective analysis of cash flow.
The whole matter on timing of disbursement is largely opaque. The gazettes released by the mighty national treasury are mostly incomplete.
It has always been a phenomenon that the budget figures are too dynamic.
The largest amounts of the financial resources are disbursed to the counties during the second half of any financial year. This being the case, the national government should come up with a solution to ensure that counties are not affected by the challenges in revenues inflows faced by the national government.
Counties are also guilty for failing to approve their budgets on time. This has an impact on disbursement from the national treasury. This is because they delay the submission of requisitions.
Counties are also faced by a capacity constraint when this is added to the disagreements between county assembly and county executive the whole cash flow issue becomes complicated.
IBP concluded that both the national and county governments do not have control over revenue inflows. For National government it’s because there is a shift from depending on taxes to loans. Hence the government cannot say exactly when they will receive money.
It is now upon the two levels of government to develop strategies to mitigate the cash flow challenges.