AG Kariuki: Releasing 50% of monies to counties is unconstitutional

Attorney General Paul Kihara Kariuki has ruled out the possibility of County Governments receiving at least 50% of the allocation due to them in the 2019/2020 financial year, citing lack of an enabling legislation.

In an advisory opinion, the government’s chief legal advisor said releasing the money would violate the constitution and the public finance management act.

“What is clear from the foregoing provisions of the Constitution is that there can be no withdrawal from the Consolidated Fund without the authorization of Parliament,” he said.

The advisory opinion was penned to Senate Clerk Jeremiah Nyegenye, who is also Secretary to the Parliamentary Service Commission and copied to Speakers of the two chambers of Parliament.

“In our considered opinion therefore, there is no legal basis under the current legal architecture, upon which the National Treasury can administratively advance funds to the county governments.”

The AG however offered a series of options to avert a financial crisis in the devolved units, following two months of grandstanding between the two chambers of Parliament over the division of revenue bill.

AG Kariuki said Parliament may register a consent at the Supreme Court, for the release of Ksh.310B to counties, by the National Treasury from the Consolidated Fund.

“…the said the amount of Ksh.310B is the minimum amount the availability of which is not contested by any party…what is in contention is whether the amount should be increased…”

The two houses are locked in a legal tussle over the amount of money that should be allocated to Counties. National Assembly has proposes a Ksh.316.5B share of the national revenue to counties, while the Senate is insisting on Ksh.335.6B.

Each house has nominated 9 members to the mediation committee established under Article 113 of the Constitution to resolve the revenue sharing dispute. The matter is also in court, after the Council of Governors lodged a petition at the Supreme Court, where the two chambers of Parliament are enjoined.

“…if such a settlement is adopted as an order of the Supreme Court, the same shall constitute a sufficient legal basis for advancing funds to County Governments, even in the absence of a Division of Revenue Act…”

To avert a total shutdown in the Counties, the National Assembly’s budget committee has proposed amendments to the Public Finance Management Act, to facilitate release of the guaranteed 15% share of National revenue to Counties. However, the bill remains on hold, since the two houses of Parliament are on a month-long recess.

The AG has backed the proposed amendments, and advised that lawmakers cut short their break, to deliberate on the proposed changes to the law.

‘…we are of the respectful opinion that the subject matter herein is of such fundamental public interest that justifies the recalling of Parliament for urgent action…’

The advisory was also copied to Acting National Treasury CS Ukur Yatani, controller of budget Agnes Odhiambo and solicitor general Kennedy Ogeto.

At least six counties are in a financial crisis with workers downing their tools for the third day, demanding their July dues.