The National Treasury has firmly denied owing any arrears to county governments, following a warning by the Council of Governors (CoG) about potential service delivery disruptions due to delayed disbursements.

In a statement on Monday, the Treasury confirmed it has disbursed Sh30.8 billion, clearing all outstanding arrears up to October 2024.

“All payments to county governments were up to date as of October 18, 2024, except for the current month,” the Treasury declared.

This brings the total amount disbursed to counties to Sh158 billion, covering funds from June through October 2024.

"As of November 18, 2024, the National Treasury has fully disbursed funds to county governments," Treasure disclosed via its X account.

"A total of Sh158,024,092,590.00 has been disbursed so far for the Months of June (arrears), July, August, September and October."

"So far all payments except for the current month of November have been settled," Treasury further stated.

The CoG had earlier sounded the alarm over delayed payments, cautioning that prolonged uncertainty could cripple essential services. Governors raised concerns over the December deadline, noting that disruptions could escalate if funds were not released promptly.

However, the Treasury dismissed these concerns, reiterating that counties are responsible for managing their allocations effectively.

It emphasised that funds should be disbursed by the fifth day of each month, in line with established protocols, to ensure smooth operations.

Treasury CS John Mbadi attributed past delays to administrative and legal challenges, including a legislative deadlock over the Division of Revenue (Amendment) Bill. A key sticking point is the Treasury’s proposal to reduce county allocations by Sh20 billion, a move opposed by the Senate.

“The Senate has insisted that once funds are allocated to the counties, they cannot be reduced,” Mbadi explained.

The Senate has also rejected the Treasury’s proposed Sh380 billion ceiling for counties, further complicating the timely release of funds.

Earlier this month, the National Assembly’s Budget and Appropriations Committee failed to reach an agreement on the amendment bill, leaving the funding framework in limbo.

The CoG has voiced frustration over the stalled County Allocation of Revenue Act (CARA), describing it as a critical legal framework needed to guide county funding.

The governors contend that the absence of CARA has placed counties under immense financial strain, leaving them unable to access their full equitable share for the 2024/25 financial year.

Despite these challenges, the Treasury has assured counties that the November disbursement issue will soon be resolved, bringing payments fully up to date.

However, the CoG insists that legislative delays must be addressed urgently to prevent further strain on devolved functions.

As the standoff persists, governors are urging swift action to resolve the impasse, warning that citizens may bear the brunt of continued disruptions in essential services.