STALEMATE

Suppliers to wait longer for Sh80.9bn pending bills

County governments are holding a total of Sh37.7 billion while the national government has Sh43.2 billion of questionable pending bills.

In Summary

•President Uhuru Kenyatta says a pending bills closing committee must verify the claimed amounts before suppliers and contractors are paid.

•The total payable outstanding bills owed by both the national and county governments is Sh26.9 billion. Suppliers have so far received Sh38.5 billion of the total Sh67.2 billion payable bills.

Treasury buildings.
UNPAID BILLS: Treasury buildings.
Image: FILE

Government suppliers and contractors with questionable pending bills will have to wait longer for the verification of the Sh80.9 billion receipts.

President Uhuru Kenyatta yesterday said all questionable pending bills must be verified before any payment is made.

This comes as the national and county governments move to clear outstanding payable pending bills totalling Sh26.91 billion(as at December 18 last year).

 

The President revisited the pending bills issue at State House Mombasa during his address to the nation.

“It is one thing to say we pay them but we must also make sure we are paying for goods and services that were actually delivered. We can't just say we are paying without verifying,” Uhuru said.

He noted that about 70 percent of verified and payable pending bills had been paid by December 31.

A special audit by Office of the Auditor General (OAG) as at June 30, 2018 indicated that out of a total Sh 88.98 billion pending bills owed by counties, Sh51.2 billion (58 per cent) were reported as payable.

Sh37.7 billion (42 per cent) lacked sufficient documentations to support services rendered or work done “and therefore were not recommended for payment”, Treasury notes in its latest update.

The amount of eligible pending bills paid by counties as at December 18, was Sh28.57 billion leaving a balance of Sh22.71 billion.

The national government owed a total of Sh58.2 billion of which Sh43.2 billion was contested with only Sh15 billion eligible for payment. Of this, about Sh10 billion was paid by end of last year leaving an outstanding of Sh4.2 billion.

 

The National Government had committed to pay the balance by January 15.

“The ones that need verification have been put to a pending bills closing committee. That committee will verify, that is when they will be eligible for payment,” Uhuru said.

He had in November last year directed that that all verified and genuine pending bills be paid immediately, a second directive after June 1, when he first called for clearance of pending bills by both national government and counties.

No clear time lines have been availed for the verification process, meaning those with questionable bills could wait longer than expected.

The private sector has continued to blame failed payments by government for low operating cash in businesses, which has greatly affected micro, small and medium enterprises.

" To avoid always circling back to the state of low liquidity, we need to put into place a prompt payment legislation that compels everyone, be it government or private sector, to make payments within a maximum of 90 days," Kenya Association of Manufacturers chairman Sachen Gudka said.

Uhuru's 70 per cent level of cleared pending bills however seems ambitious compared to treasury data which shows a total of Sh38.5 billion of the Sh67.2 billion has been paid, amounting to 57.3 per cent.

Before his last year Madaraka Day directive, the total(both payable and contested ) stood at Sh147.18 billion, which was blamed for low liquidity amid stifling businesses in the private sector.

Last Friday, Treasury CS Ukur Yatani said the government will reign on ministries, government agencies and counties to ensure they clear their bills, even as he appealed to the private sector to also pay their supplier.

It cuts across board. It is not only government failing to pay,” he noted.