Why some counties may face cash crunch

Bomet Governor Joyce Laboso holds the first meeting with county chief officers and directors.

The chaotic transition that has seen new governors sack executives is expected to paralyse financial operations in some counties.

This is after it emerged that some of the sacked staff still hold the key in accessing funds for the counties, especially in bank accounts held at the Central Bank of Kenya (CBK).

Counties that have fired county executives for finance may not be able to draw any money, after the CBK issued regulations to guide the change of signatories.

CBK announced that the County Executive Committee (CEC) member for finance and the current signatories are still authorised to transact and are accountable for the operations of those accounts until advised otherwise.

The new CECs will seek account authorisation in line with CBK requirements.

They may thereafter either appoint new or confirm existing signatories as Internet Banking (IB) users to the accounts at CBK for the county.

“As provided for in Article 198 of the Constitution on transitional arrangement for County governments, the existing signatories and IB users to the county governments’ accounts at CBK remain authorised to transact and are accountable for the operations of those accounts until the CBK is advised otherwise,” CBK Acting Director, Banking Services Mwenda Marete wrote to all counties on August 17th.

Already some counties have not paid staff July salaries after their access to the National Treasury’s Integrated Financial Management Information Systems (IFMIS) was deactivated.

Affected counties are Nakuru, Mandera, Kwale, Elgeyo Maralwet, Taita Taveta, Nyeri, West Pokot and Uasin Gishu.

IFMIS Director Jerome Ochieng’ has sought to dispel the fears by assuring the affected counties that their access will be restored as soon as The Treasury sorts out the transition matter.

Kisumu, Meru, Tharaka Nithi and Nakuru counties are among those that have sent some staff home pending new appointments while Nairobi’s CEC for Finance Gregory Mwakanongo and Chief Finance Officer Luke Gatimu are under investigation by the Ethics and Anti-Corruption Commission over corruption related claims.

There have been claims that some of the staff being fired by new governors are victims of a political witch hunt.

Public Service Commission chair Prof Margret Kobia warned that the dismissals may cost the government millions of shillings in court settlements if workers fired illegally sue.