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The Controller of Budget (CoB), Margaret Nyakang’o rejected Sh5.16 billion worth of requests from counties in the year that ended in June after the devolved units flouted the law on deduction of taxes and payment of pending bills.
Dr Nyakang’o said her office turned down 166 requisitions after counties failed to deduct withholding taxes and pay-as-you-earn (PAYE), falsified and incomplete documentation, and breach of requirements on prioritising payment of pending bills among others.
All 47 counties must get approval from the CoB to withdraw money, which is held in their respective revenue accounts, in line with Article 207 of the Constitution.
County Revenue Funds are the accounts into which all money that is raised or received by or on behalf of each of the regional governments is paid. This, however, excludes money reasonably excluded by an Act of Parliament.
Rejection of the requisitions highlights growing concerns where counties continue to breach legal requirements on how to spend money, as billions of shillings continue to be unaccounted for or diverted.
Withdrawal of funds from the County Revenue Fund is authorised by the County Appropriation Act. The County Treasury is required to seek the CoB’s nod for withdrawal of funds from the County Revenue Fund to the County Executive and County Assembly bank accounts. These entities are responsible for administration of their respective approved budgets.
“Other requisitions were declined due to various reasons such as non-deduction of applicable withholding taxes and PAYE …., non-adherence to pending bill payment plans, submission of incomplete documentation and non-compliance with legislation establishing public funds within the provisions of the Public Finance Management Act and Regulations,” Dr Nyakang’o said.
Counties made 8,636 requisitions to Dr Nyakango’s office, seeking approval to withdraw Sh456.37 billion in the year that ended June, but only 8,470 requests worth Sh451.21 billion were approved.
This comes at a time when counties have been put on the spot for perennially making statutory deductions and failing to remit them to the relevant agencies.
Besides PAYE, others are pension, National Social Security Fund, and National Health Insurance Fund (now Social Health Insurance Fund).
Additionally, the budget controller has flagged counties for making requisitions for fictitious claims for contractors, an avenue that has been used by rogue county officials to loot.
Pending bills for counties stand at over Sh181.9 billion highlighting the impact of non-compliance to the law and directives to clear the arrears.
Failure to remit deductions and prioritise payment of pending bills is a breach of the law, prompting Dr Nyakang’o to crack the whip.
Counties have also defied directives from the National Treasury on prioritisation of pending bills and ensuring that they remit all statutory deductions made from the payslips of county employees.
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