County governments may have to find other ways of dealing with delays in the release of funds after the High Court ended a long-running case filed by the Council of Governors (CoG) over the timely transfer of money from the National Treasury.
The case had been brought by the Council in an effort to ensure that counties receive their equitable share of national revenue without delays. The governors wanted the court to direct the National Treasury and the Controller of Budget to release the funds allocated to counties by the 15th day of every month.
According to the Council, delays in the transfer of funds were affecting the normal running of county governments. The governors argued that when money is not released on time, counties struggle to meet their financial obligations and provide important services to residents.
Among the concerns raised was the impact on county employees, who depend on the timely availability of funds for the payment of their salaries. Delays can also affect the ability of counties to pay suppliers and maintain essential services such as health care, water, sanitation and other local government programmes.
The CoG also asked the court to order the immediate release of any outstanding equitable share owed to counties. It argued that the National Treasury did not have a legal basis to delay the funds or make their release dependent on the payment of pending county bills.
The petition was filed in December 2019 after the governors accused the Treasury of repeatedly delaying the transfer of county funds despite constitutional provisions requiring equitable share revenue to be transferred to counties without undue delay.
The Attorney General opposed the case, arguing that the Council of Governors had not first used the dispute-resolution procedures established under the Intergovernmental Relations Act.
The government maintained that the Council should have exhausted those mechanisms before seeking intervention from the High Court.
Justice Roselyne Aburili rejected another argument raised against the Council, finding that the CoG has the legal capacity to institute proceedings on matters affecting the collective interests of the 47 county governments. The judge noted that the Council qualifies as a “person” under Article 260 of the Constitution.
However, Justice Aburili agreed with the Attorney General that the Council had not demonstrated that it had exhausted the required statutory mechanisms for resolving disputes between the national and county governments.
The judge also referred to an earlier decision by the Supreme Court concerning the transfer of equitable share funds.
The Supreme Court had previously held that courts could not set a specific operational deadline requiring the National Treasury to release the funds to counties on a particular day every month.
The Supreme Court made it clear that any delay in transferring money to counties must have a valid explanation. Such delays should also be addressed through the appropriate forum involving the national and county governments.
Justice Aburili therefore concluded that the High Court could not grant the main orders requested by the governors, especially the demand for Treasury to release county funds by the 15th of every month.
The judge consequently upheld the Attorney General’s objection and struck out the CoG petition and the applications filed alongside it. The decision brings to an end a case that had remained before the courts for about seven years.
The ruling does not remove the importance of timely funding for county governments. Counties still depend heavily on their equitable share to meet their financial responsibilities.
Any delays in accessing the money can create pressure on county administrations and make it harder for them to plan and meet their obligations.
For county workers, the development means that the issue of delayed funding will continue to be handled through existing constitutional, statutory and intergovernmental mechanisms rather than through a court-imposed monthly deadline.
The Council of Governors and individual county governments will therefore have to rely on those mechanisms when seeking explanations or action over delayed transfers.
Meanwhile, the timely release of funds remains important for counties to pay workers, settle bills and continue providing services to millions of Kenyans.
