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{
    "id": 1478499,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1478499/?format=api",
    "text_counter": 149,
    "type": "speech",
    "speaker_name": "Hon. John Mbadi",
    "speaker_title": "The Cabinet Secretary for National Treasury and Economic Planning",
    "speaker": {
        "id": 110,
        "legal_name": "John Mbadi Ng'ong'o",
        "slug": "john-mbadi"
    },
    "content": "So, we are very comfortable with regular and continuous transfers. However, the problems that we encountered at the beginning of this year is primarily the legal challenges. There were two schools of thought, because Senators are aware that the two Houses have not passed the County Revenue Bill (CARB) for 2024/2025. Mr. Speaker, Sir, there were two schools of thought. There was one school of thought which believed that we cannot transfer money to counties until and unless we have two critical pieces of legislation; that is, the Division of Revenue Act (DORA) and the CARA. There is another school of thought, where fortunately I belong, that we have regulations in place which allows transfer of up to 50 per cent of the previous year’s allocation, which in this case was Kshs385 billion. However, to be very careful and clear, my office had to seek legal opinion from the Office of the Attorney General, which fortunately we got. The Attorney General agreed with the second school of thought, where I belong. In July, we cleared the last Financial Year 2023/2024. We paid Kshs30.8 billion in July to clear that financial year. Last week, we paid July allocation of Kshs31.8 billion to counties. We have not paid the August and September allocations. Nonetheless, I guarantee that we are making plans to at least make one more payment for the month. We seem to be having a deficit of not less than a month and we will try to catch up. Before the end of this year, we must catch up so that we do not have any outstanding amount to the counties. Having said that, because Senators are also responsible for oversighting the counties, let us also try to put pressure on the counties to sort out their issues with the Controller of Budget (CoB), so that we do not have huge balances sitting in the County Revenue Fund (CRF) account. As we speak today, there is Kshs42 billion which has not been absorbed or taken up by counties and the details are there. I do not want to go to the specific details of the counties. We have Kshs42,380,773 that counties have not been able to access. The money is there in the CRF account of Kshs38.2 billion and another Kshs3 billion under recurrent, and Kshs969 million under Development Vote. We need to have a smooth absorption. As an accountant and a finance expert, the last thing you would want to see is balances accumulating in idle accounts. It does not add value to the economy. It slows economic growth. Once the money is transferred to the CRF, it should go to the counties to pay salaries, recurrent and get into development. As we speak, largely, the development money should be with the counties. The national Government’s development budget is shrinking by the day. Therefore, I do not want to go beyond that. Maybe another day, I will have the opportunity to talk about the transfers to counties and absorption of the budgets or the exchequer releases. Thank you, Mr. Speaker, Sir. I end there and hope I have covered all the questions."
}