National Treasury CS Secretary Ukur Yatani has directed governor Mike Sonko to release funds due to Nairobi Metropolitan Services (NMS), bringing an end to months of impasse over funding of the new office.
Mr Yatani said a framework to guide the funding of the Major General Mohammed Badi-led office had been developed paving way for Mr Sonko to transfer funds from the County Revenue Fund (CRF) account to NMS.
He explained that the National Treasury had developed the required framework in line with the requirement of the Deed of Transfer of Functions.
The CS added that the framework took into account Constitutional and legal provisions as outlined in County Allocation of Revenue Act (CARA), 2020 as well as the provisions of the Deed.
“The purpose of this letter therefore is to forward to you the framework and request you to ensure adherence to the requirements,” said Mr Yatani in a letter dated November 30, 2020 addressed to Maj-Gen Badi and Mr Sonko.
The letter is copied to the Attorney General Paul Kihara, Controller of Budget Margaret Nyakang’o and NMS Deputy Director-General Kang’ethe Thuku.
NMS has been unable to receive funding from Nairobi County government for the four transferred functions of health, transport, public works, utilities and ancillary services, county planning and development services due to the lack of a legal framework for it.
In September, Maj Gen Badi’s request to the National Treasury to release the funds to pay the 6,852 county staff was declined by CS Yatani over the same legal hurdle.
In his response, the CS said there was no legal framework in place to facilitate such a transaction and that the funds can only be remitted to the Nairobi County Government (NCCG) Revenue Fund Account and not to NMS.
He pointed out that according to section 4 (2) of County Allocation of Revenue Act (CARA), 2020, each county government’s allocation shall be transferred to the respective County Revenue Fund, in accordance with a payment schedule approved by the senate and published in the Kenya gazette by the CS in accordance with section 17 of PFM Act, 2012.
“The above legal provisions therefore imply that equitable share allocation due to Nairobi City County Government, including monies for personnel emoluments, shall be transferred to NCCG Revenue Fund Account,” said Mr Yatani in a letter dated October 15, 2020.
Mr Yatani explained that specific tenets of the law made it illegal to approve such a transaction since there existed an unresolved dispute between City Hall and NMS on matters budgeting, oversight of NMS funds and secondment of staff to NMS.
The stalemate stemmed from a notice of a declaration of dispute registered by Governor Sonko on July 24, 2020.
In the latest letter, Mr Yatani said the legal challenges have been addressed by the said funding framework with Sonko now free to release the funds.
Mr Sonko had also declined to sign the Sh37.5 billion county government’s budget contesting allocation of Sh27.1 billion to NMS.
And even when the Nairobi City County Appropriations Bill, 2020 was gazetted, he refused to sign warrants to authorise release of the budgeted funds.
However, the CS said every legal and Constitutional provisions pertaining to the funding of NMS in accordance with Article 187(2)(a) of the Constitution, Article 5.1 and 5.2 of the Deed and CARA section 7(1)(2) and (3) have been adhered to.
“The proposed framework takes into account the above stated constitutional and legal provisions as contained in CARA, 2020 as well as the provisions of the Deed of Transfer of Functions,” added Mr Yatani