Counties rush to spend Sh30.99 billion disbursed before end of financial year

A last-minute disbursement of Sh30.99 billion to counties just five days before the end of the financial year has sparked concern over the likelihood of rushed and questionable expenditure by devolved units.

The funds, released by the National Treasury on Wednesday, triggered a wave of emergency spending requests, known as requisitions, to the Controller of Budget before the Integrated Financial Management Information System (IFMIS) shuts down at midnight on June 30.

The abrupt timing of the release has alarmed budget oversight institutions, raising fears that the money could be misused or spent on non-essential projects disguised as end-of-year obligations.

The move, however, clears all pending exchequer disbursements for the 2024–25 financial year, with counties having now received a total of Sh418 billion, including carryovers from the previous financial year.

Last year, Treasury delayed Sh30 billion meant for June, only releasing it in the new fiscal cycle.

This year’s release fulfils a pledge made by Deputy President Kithure Kindiki, who during Monday’s (June 23) 27th Ordinary Session of the Intergovernmental Budget and Economic Council assured counties that all dues would be paid before the fiscal year closed.

“We don’t have any pending allocations apart from June’s, which will be released on time,” the Deputy President had said at the meeting.

Earlier reports had suggested the Treasury might not release the full amount before the deadline. While the national government has technically fulfilled its obligations, the eleventh-hour release has put counties under pressure to spend quickly, raising accountability concerns and questions about how much of the money will be effectively absorbed.

From the Sh30.99 billion released, Nairobi received the highest amount at Sh1.61 billion, followed by Nakuru (Sh1.09 billion), Turkana (Sh1.05 billion), and Kakamega (Sh1.03 billion). Other significant allocations went to Kiambu (Sh983.49 million), Kilifi (Sh973.58 million), Mandera (Sh935.24 million), Bungoma (Sh893.65 million), and Kitui (Sh870.87 million).

Additional beneficiaries include Wajir (Sh792.22 million), Meru (Sh795.54 million), Machakos (Sh767.77 million), Kisii (Sh744.46 million), Narok (Sh739.68 million), Kwale (Sh690.03 million), and Kisumu (Sh672.42 million).

Despite the legal requirement under Section 17 of the Public Finance Management Act, 2012, for the Treasury to disburse funds by the 15th of every month, counties often face delays. Disbursements are frequently pushed to the end of the financial year or even beyond, undermining service delivery and financial planning at the county level.

While Treasury has in the past blamed cash flow issues and national obligations for the delays, critics argue that the national government unfairly takes precedence over counties.

County governments rely heavily on Treasury disbursements to finance operations, including staff salaries, due to limited income from other sources such as local revenue collection, grants, loans, and investments.

The erratic disbursement pattern, analysts warn, could derail progress made under devolution unless urgent reforms are implemented to ensure fair, predictable and timely release of funds, in line with constitutional and statutory guidelines.