He added that the September disbursement was released last week by the National Treasury and is yet to reach the designated accounts.
The law dictates that any public funds disbursed to counties must go through the County Revenue Fund. The Public Finance Management Act, 2012, mandates that the County Treasury create and maintain a County Revenue Fund. This should be done for each county, with the County Revenue Fund held either at the Central Bank of Kenya or another approved bank.
"The County Treasury for each county government shall ensure that all money raised or received by or on behalf of the county government is paid into the County Revenue Fund," reads Section 109(2) of the Act.
This means that when the National Treasury releases funds, as Mbadi revealed, the money first goes into the respective County Revenue Fund (also known as the County Exchequer Account), where the Controller of Budget is mandated by law to authorise the withdrawal of the funds with the appropriate documentation.
Mbadi stated that as of November 14, 2024, there was Sh49.13 billion yet to be withdrawn by the counties. This included Sh32.8 billion that had been released as part of the September disbursement.
"This is because of issues between counties and the Controller of Budget. That is not a problem with the National Treasury," Mbadi said.
The Council of Governors has not yet made public the number of counties currently facing cash flow problems or the reasons for this, considering that the National Treasury has already released the funds.''
The Public Finance Management Act states that the County Treasury must obtain the written approval of the Controller of Budget before withdrawing money from the County Revenue Fund. This approval can only be granted in accordance with an Act of the county assembly or county legislation that appropriates money for a public purpose, or under the Public Finance Management Act, as outlined in Sections 134 and 135.
These sections detail the exceptional circumstances under which counties can withdraw money from the County Revenue Fund when the appropriate laws have not been passed or in emergencies that necessitate such spending.
"The approval of the Controller of Budget to withdraw money from the County Revenue Fund, together with written instructions from the County Treasury requesting the withdrawal, is sufficient authority for the approved bank where the County Exchequer Account is held to pay amounts from this account in accordance with the approval and instructions," the Public Finance Management Act states.
The Council of Governors has not yet made public the number of counties currently facing cash flow problems or the reasons for this, considering that the National Treasury has already released the funds as indicated by Mbadi.
The Standard was informed by the office of the Controller of Budget that once this information is made available, a response can be issued.