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County governments with pending bills could soon have a percentage of their equitable shareable revenue retained by the National Treasury to clear the outstanding obligations.
In a move that could come as a shocker to the county bosses, senators are pushing for the introduction of a law to enable the Treasury to retain the funds.
The Senate County Public Accounts and Investments Committee, which is pushing for the legislation, said this would be the surest way to deal with the perennial pending bills crisis.
“The committee will seek to reintroduce the Prompt Payment Bill with amendments aimed at ring-fencing a certain percentage of the equitable shareable revenue for pending bills and retain money at source to pay pending bills,” the team said in a report.
The development could trigger uproar among governors who have been on the spot for the accumulation of huge debts in the counties.
The Homa Bay Senator Moses Kajwang-led committee proposed the radical move after revelations many counties are not paying their contractors and suppliers.
“The committee observed that the county entities had pending bills that had been outstanding for several years,” the panel said in its report on the consideration of the auditor general’s reports for various county executives for 2019-20.
Further, the entities continued to incur bills without prioritising payment of verified pending bills as a first charge in the subsequent financial year as required by law, the report stated.
Meanwhile, the committee recommended that all valid pending bills that have been reviewed by the auditor general be paid and a payment plan be submitted to the county assemblies for approval.
According to the latest budget implementation review report for the first quarter of the current financial year, counties' pending bills stood at Sh168.62 billion in September.
Failure to clear pending obligations has continued to hurt businesses.
“The accumulation of pending bills negatively impacts public service delivery and disrupts business operations,” Controller of Budget Margaret Nyakang’o warned.
The Nairobi government reported the highest pending bills at Sh121.06 billion followed by Garissa county at Sh6.07 billion, Kiambu (Sh5.90 billion), Turkana (Sh4.78 billion), Machakos (Sh4.42 billion) and Mombasa (Sh3.93 billion).
Analysis of the CoB report revealed that the pending obligation rose by more than Sh15 billion in 20 counties between July 1 and September 30, 2024.
According to the report, governors Johnson Sakaja (Nairobi) and Jeremiah Lomorukai (Turkana) have been put on the spot after revelations their administrations accumulated close to Sh7 billion in pending bills in just three months.
The report shows that Turkana’s pending bills rose by Sh4.02 billion while Nairobi increased by Sh2.61 billion.
The sharp increase happened between June 30 and September 30, 2024.
According to the reports by Nyakang’o, Turkana’s bills rose from Sh749.85 million in June to Sh4.77 billion in September.
For Nairobi, the pending obligations increased from Sh118.44 billion to Sh121.05 billion over the period.
The two counties are leading the
pack in the accumulation of pending
bills in what is emerging as a monster
in the devolved units.
Governors Moses Badilisha’s Nyandarua, Ochillo Ayacko’s Migori and
Patrick Ntutu’s Narok have accumulated close to Sh1 billion each in pending
bills in three months.
