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{
    "id": 763923,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/763923/?format=api",
    "text_counter": 216,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "2017/18 because we have noted variances between the county allocations in the Schedule and those approved in the County Allocation of Revenue Act (CARA) of 2017. The variances relate to the allocations in Column D, Column E and Column G of the Third Schedule of the CARA of 2017. The allocations under Column E were understated by Kshs 1,250,000,000 while allocations under column G were understated by Kshs 419,638,872. On the other hand, allocations under column D were overstated by an amount equivalent to the sum of the shortfalls under column E and G. In our view, the misalignment between the Disbursement Schedule and the CARA of 2017 could potentially pose some challenge. For example, the funds flow modalities as well as accounting responsibilities for the conditional allocations under column D of the Third Schedule of CARA 2017 differ from that for conditional allocations under columns E and G. These allocations are also governed by financing agreements entered into by the development partners and the National Government. It is, therefore, important that the conditional allocations are reflected in the correct columns of the Third Schedule of CARA 2017 because different frameworks for managing the allocations apply to each of the columns. Please note that we also sought the legal opinion of the office of the Attorney General on how to proceed with finalizing the Schedule for placement in the Kenya Gazette. The office of the Attorney General has come back to us vide letter of Ref. No. AG/CONF/5/38 VOL. 1/130 dated 17th October 2017 and copied to you, with a recommendation that the Disbursement Schedule and the Third Schedule of the CARA of 2017 must be aligned. The office of the Attorney General advised us to align the two and forward to the Senate for approval prior to publication. Upon receipt of the legal advice from the Attorney General, the National Treasury prepared the necessary amendments to CARA of 2017 and Disbursement Schedule. The proposed amendments to CARA of 2017 were forwarded to the Senate for consideration and approvals vide our letter Ref. No. IGFR/CD/01 (23) 24th October 2017. (b) Explain the reason for the late disbursement of funds to counties for the month of August and September which have not been disbursed to date. (c) Explain measures the government has put in place to cushion counties from the resultant cash crunch. It should be noted that the Disbursement Schedule is yet to be approved and placed in the Kenya Gazette in the manner contemplated under Section 17 of the Public Finance Management Act of 2012. Please note that even as we await the consideration and approval of the proposed amendments to CARA of Parliament, 2017, the National Treasury continues to release funds to county governments, taking into account county governments’ bank balances at the Central Bank of Kenya (CBK). Please note that the Article 201(d) requires that public money be used in a prudent and responsible way. In our view, prudent use of public money entails release of funds when county governments are ready to use the funds. Holding cash balances at the Central Bank of Kenya (CBK) does not reflect prudent use of public money. It is for this reason that the National Treasury, in releasing funds to county governments takes into account county government balances at the CBK. We have attached table 1 which shows the status of cash disbursements to county governments."
}