County governments have been put on notice over the growing accumulation and poor disclosure of pending bills, with a parliamentary committee warning that the situation could be worse than officially reported.
According to a report by the Senate County Public Accounts committee, red flags have been raised over the scale and management of the liabilities,“The Committee observed with concern that the accumulation of pending bills (trade and other payables) remains a pervasive problem. The total quantified liability from pending bills across the 15 counties for the FY 2024/2025 is at least Sh. 32.3 billion.”
The report further cautions that the actual debt could be significantly higher due to lack of proper documentation, noting that “a substantial portion of this debt is unsupported, long-outstanding, and unreconciled, rendering the true liability potentially much higher.”
The Committee also flagged widespread violations of financial regulations, observing that “Many counties have payables exceeding Sh.1 billion, with significant portions outstanding for over 365 days.”
It warned that such practices contravene the law, adding that “The failure to provide proper ageing analyses and supporting documentation for these payables renders financial statements inaccurate and unverifiable.”
To address the crisis, the Committee issued a raft of recommendations, including stricter accountability measures and timelines for clearing debts.
The report directs, “Trade payables due for more than 365 days be considered indicative of poor financial management, and the County Executive must provide an actionable payment plan to the Controller of Budget (CoB) within ninety (90) days of the adoption of this report.”
It further directs counties to prioritize critical obligations,“All county governments must prioritize the payment of verified pending bills owed to staff, statutory deductions (KRA, NSSF, NITA), and pension funds within ninety (90) days of the payables becoming due, as these constitute a first charge.” The report notes.
The Committee has also called for investigations into possible misuse of funds,“The Ethics and Anti-Corruption Commission (EACC) to investigate pending bills, particularly those owed to staff and statutory bodies, to establish whether funds due were retrieved from the County Revenue Fund and, if so, how they were utilised, with a view to recommending prosecution of liable persons.” Kajwang’ led committee report noted.
Additionally, the Controller of Budget has been urged to tighten oversight, with the report stating that it “is directed to consider a county’s efforts to clear inherited pending bills as a key factor when approving exchequer releases.”
The Committee report notes that failure to comply with payment plans could result in funding restrictions, warning that subsequent budget releases may be withheld for non-compliant counties.
