Market news
Counties lose Sh1bn grants
Friday, October 15, 2021
National Treasury Building. FILE PHOTO | NMG
Summary
- Counties lost Sh1 billion in conditional grants in the financial year ending June 30, 2021, due to non-compliance with public finance regulations, a new report from the National Treasury shows.
- Counties only received Sh12.7 billion in conditional grants out of the total Sh13.7 billion that had been allocated for disbursement in the financial year.
Counties lost Sh1 billion in conditional grants in the financial year ending June 30, 2021, due to non-compliance with public finance regulations, a new report from the National Treasury shows.
Counties only received Sh12.7 billion in conditional grants out of the total Sh13.7 billion that had been allocated for disbursement in the financial year.
” Several county governments did not receive 100 percent of their conditional transfers. This has been attributed to their inability to meet specific condition requirements attached to both Kenyan governments and development partner grants, the failure of ministerial departments and agencies (MDAs) to properly budget for the funds and the delay of the MDAs to request the funds ”, declared the Treasury.
Conditional grants included cash from national government and donors to ensure delivery of basic services, achieve international commitments such as the UN Sustainable Development Goals (SDGs), fund under-resourced services or infrastructure, and make counties perform accounts financially and programmatically.
These conditional grants can be disbursed to counties through Treasury releases from the National Treasury or direct external assistance from development partners.
Conditional grants come with conditions to avoid diverting spending on items not specified in your budgets. For example, if a county receives a conditional grant for level five hospitals, it should not divert the money for purposes other than these hospitals.
Currently, the national government issues conditional grants to counties in the form of support for level five hospitals, highways, and the development of youth polytechnics.
However, not all counties benefit from these conditional grants because they are subject to a county meeting some specific requirements.
For example, a county would only receive a level five hospital grant if it has such a hospital in its jurisdiction.
Transferred units are also required to meet certain conditions, such as financial reporting to the funding agency to receive conditional grants.
According to the Treasury, some of the conditional allocations affected by this breach include Sh935 million for the water and sanitation development project and Sh405 million for the project to transform health systems for universal care.
Other resource-poor projects included the National Inclusive Rural Growth and Agriculture Project with Sh362 million undisbursed, Sh1.18 billion for the Kenya Climate-Smart Agriculture Project, Sh51 million for the Kenya Urban Support Program, and Sh125 million for building the county seat.
However, during the year, the transferred units received Sh316.5 billion of the equitable share of the revenues and an additional Sh29.7 billion accrued from the previous financial year.
Some Sh9.4 billion was also disbursed from the road maintenance fuel tax fund raised by the Kenya Roads Board (KRB) from motorists through the purchase of fuel.
They also received income of 26.1 billion shillings from external loans and grants through the national government.