• Treasury directed MDAs to submit reports on the status of pending bills at the respective entities by April 30.
• Pending bills in respect of state corporations were the highest at Sh274.3 billion, while those of ministries and state departments were Sh48.2 billion.
The National Treasury has fired a warning shot to ministries, state departments, and agencies over unpaid pending bills running into hundreds of billions of shillings.
Sources intimated to the Star that pending payments to suppliers and contractors – a number that now faces auction, stood at Sh273 billion as of March 2021.
Treasury, in February 2021 data, said national government pending bills as of December 31, 2020, amounted to Sh322.5 billion.
Pending bills in respect of state corporations were the highest at Sh274.3 billion, while those of ministries and state departments were Sh48.2 billion.
Treasury Cabinet Secretary Ukur Yatani, in a circular to all accounting officers, has thus asked MDAs to submit reports on the status of pending bills at the respective entities by April 30.
The CS said state agencies have no excuse for delaying the payments, which expose the extent of defiance of directives by President Uhuru Kenyatta that pending bills be made the first charge.
The President, in a memo to all ministries and state agencies on July 8, 2020, directed that they prioritise settlement of all verified pending bills as the first charge in their budgets.
Yatani also cited a Treasury circular of June 23, 2020, which directed the treatment of pending bills carried over from the financial year 2019-20 and prior years.
State corporations were in a June 16, 2020, circular directed to settle all unremitted Sacco and loan deductions as well as those to PAYE, NSSF, NHIF and pension arrears.
Outstanding payments include the Sh3.1 billion owed by the IEBC—largely in court awards—and Sh1.2 billion owed to Postal Corporation of Kenya by the Public Service ministry.
The Environment ministry owed suppliers and contractors to the tune of Sh4.84 billion, while the Water ministry had yet to settle debts totalling Sh5.5 billion, mostly historical.
The Tourism department had an outstanding Sh82 million for Tele News Africa and Atlantic Region since 2004, whereas Kenya Wildlife Service was grappling with a bill of Sh40.4 million.
Some of the payments date to the said periods and have become a cause of concern to the exchequer, which argues that money for settling the bills has been provided in the budget.
Yatani said the financial year 2020-21 supplementary estimates no1 have been approved by the National Assembly and the revised budget uploaded in the IFMIS.
“Accordingly, you are required to settle eligible pending outstanding pending bills without further delay,” the Treasury CS said in an April 9 notice to MDAs.
State corporations’ pending bills include payment to contractors as well as projects, suppliers, unremitted statutory and other deductions, and pension arrears for Local Authorities Pension Trust.
The highest percentage of the corporation’s bills are for contractors and suppliers, while those of ministries and state departments are largely historical or contested bills and court awards.
The national government policy of clearance of pending bills is still in force, hence the latest follow up initiated by the National Treasury.
The Budget Committee of the National Assembly, in its review of the supplementary estimates, decried the pending bills situation.
The committee chaired by Kieni MP Kanini Kega said the budget cuts in the first Supplementary Budget were likely to lead to further accumulation of the pending bills.
“As pointed out by departmental committees, most of the reductions have been undertaken on projects whereby funds had already been committed.”
Furthermore, the committee reported that there are numerous court awards for settling various matters but line ministries have been given provisions to clear them.
“It is noted that many historical pending bills came about due to mid-year adjustments. A solid solution must be found to sustainably eliminate pending bills,” the team said.
MPs said a solution lies in the enforcement of the Public Finance Management Act, 2012, and the procurement law.
“The pending bills are also occasioned by dues for the supply of goods and services under the recurrent budget as a result of lack of budgetary allocation,” MPs said.
They recommended the National Treasury set aside funds for the settlement of pending bills and court awards in the budget for the financial year 2021-22.
Parliamentary Budget Office said the pending bills crisis is more serious in the roads sector, citing payables of about Sh50 billion.
-Edited by SKanyara