STATE HEADACHE

Ministries face crisis over Sh178 billion pending bills

Directive is that pending bills be the first charge on budgetary allocations

In Summary
  • Head of Public Service Joseph Kinyua on Tuesday asked state corporations to clear bills by November 30
  • During the Madaraka Day celebrations, Uhuru ordered ministries, departments and agencies to clear their pending bills
President Uhuru Kenyatta
DIRECTIVE: President Uhuru Kenyatta
Image: FILE

To pay or not to pay? That is the dilemma Cabinet Secretaries and their ministries are grappling with over Sh178 billion pending bills which, if settled in full, would likely to plunge ministries into a financial crisis.

However, under pressure that Kenyans are broke and government suppliers are being auctioned, President Uhuru Kenyatta has ordered pending bills be settled in full by end of this month.

 

Head of Civil Service Joseph Kinyua has directed all government departments to furnish his office with reports on the settlement of the bills that have turned into a nightmare for the Jubilee administration.

“Please note that the government has made a commitment to complete these payments by 30 November 2019. I ask everyone involved to take necessary measures to meet the deadline,” Kinyua said in a memo dated November 19.

However, it has emerged that settling the pending bills in full would nearly cripple some ministries, exposing the tough times in government.

For instance, the Health Ministry has pending bills amounting to Sh41.7 billion against this financial year’s budget of Sh92 billion.

Cabinet Secretary Sicily Kariuki cried foul that should they proceed to pay all the bills, her ministry would grind to a halt.

The Infrastructure Department has the lion's share of the pending bills having failed to settle claims amounting to Sh71.2 billion from its Sh186 billion budget.

This accounts for 40 per cent of the pending bills as at October 31.

 

The Water Ministry is yet to settle Sh12.6 billion against an allocation of Sh62.5 billion.

The bills include Sh181 million the ministry inherited from projects under the National Water Harvesting and Storage Authority.

The government further owes suppliers – ostensibly maize farmers and fertilizer dealers - Sh12.5 billion for items expended by the Crops Development Department.

The department was allocated Sh22 billion whereas the Livestock Department is yet to settle Sh4.12 billion bills from a Sh6.9 billion budget.

The Youth Department is yet to settle Sh10.6 billion from its approved Sh17.4 billion budget.

IEBC owes suppliers Sh3.3 billion for supplies during the 2017 General Election. The polls agency was allocated Sh4.8 billion in the current financial year.

Parliament is yet to settle Sh1.17 billion it owes contractors and suppliers. It has a budget of Sh16.7 billion but which Treasury wants slashed by Sh6.4 billion in the current supplementary estimates.

Another Sh6.2 billion owed by the Department of Correctional Services remains unsettled although a committee formed to probe the eligibility of the same held that they are unpayable.

Over the last five years, pending bills have been pilling in government with the auctioneer's hammer falling on contractor’s assets.

But now, acting Treasury Cabinet Secretary Ukur Yatani said the Exchequer is likely to suspend expenditure for ministries and departments, except for salaries and essential services, until pending bills are paid.

"Unless we reign in and enforce this, the luxury of accounting officers paying at their own time does not arise. Treasury will no longer entertain a situation where we do not live by our commitments," Yatani said. 

Already 15 counties risk losing out on share of national revenue if they don’t pay their dues by December 1.

They are Narok, Machakos, Nairobi, Vihiga, Isiolo, Tana River, Migori, Tharaka-Nithi, Bomet, Kirinyaga, Nandi, Mombasa, Kiambu, Garissa and Baringo.

Treasury revealed that only 12 counties had complied with the directive to settle the pending bills while 20 counties were yet to fully comply.

According to latest government data, the Interior ministry owes its suppliers Sh4.4 billion while Vocational Training is yet to settle debts amounting to Sh916 million.

Public universities owe suppliers Sh896 million in unreleased development funds from the Exchequer while President Uhuru Kenyatta’s office is yet to pay Sh632 million.

The National Land Commission is faced with claims amounting to Sh848 million; Housing Department Sh766 million)while Public Works contracts of Sh526 million are still due.

The Lands ministry is yet to settle Sh430 million while the ICT Department is yet to complete payment of Sh248 million it owes various suppliers.

Eugene Wamalwa’s Devolution ministry is still in the process of auditing its bills of Sh209 million whereas the National Treasury is yet to settle Sh241 million for lack of documentary support.

The ICT ministry has cited budgetary constraints as its reason for failing to settle Sh757 million, which excludes another Sh249 million which are non-compliant.

Office of the Director of Public Prosecutions is yet to settle Sh261 million for lack of disbursement from the Exchequer. Their budget is Sh3.04 billion.