•The National Treasury and the office of auditor general have launched an audit of the pending bills in the counties.
•Treasury CS Ukur Yatani revealed that the devolved units have pending bills amounting to Sh90 billion that have accumulated for several years.
The National Treasury and the auditor general have launched an audit of pending bills in the counties.
Treasury CS Ukur Yatani revealed that the devolved units have pending bills amounting to Sh90 billion that have accumulated over the years.
“At the moment, we are in the range of Sh80 billion and Sh90 billion which has not been settled,” Yatani told a Senate committee on Tuesday.
The CS termed the growing bills a matter of great of concern as it has forced many economic drivers – SMEs – out of operation.
The Treasury estimated arrears owed to contractors and suppliers by ministries, departments and agencies at national level at about Sh307.8 billion as at the end of March 2021.
An audit conducted by the auditor general on behalf of the National Treasury in 2018 indicated that both the national and county governments owed suppliers more than Sh225 billion dating back several years.
Yatani spoke days after he threatened to withhold funds to national government ministries, departments and agencies and counties that have accumulated bills without justification.
“Government ministries, departments and counties are directed to clear pending bills by June 30,” Yatani said when he unveiled the Sh3.6 trillion 2021-2022 budget estimates.
“To enforce compliance, Treasury will stop cash transfers to counties that don’t comply with the directive and I urge the MPs to support the proposal,” he added.
In April this year, the Treasury issued a warning to ministries, state departments, and agencies over unpaid pending bills running into hundreds of billions of shillings.
Yatani had in a circular to all accounting officers asked MDAs to submit reports on the status of pending bills at the respective entities by April 30.
Speaking when he appeared before the Senate Finance and Budget Committee, the CS said nonpayment of bills has made the lives and the livelihoods of the people at the county level unbearable.
“But we are seeing cases where payment of pending bills is treated like they are not very important. And this has a net effect on the economy,” Yatani said.
He told the committee chaired by Kirinyaga Senator Charles Kibiru that his ministry and Auditor General Nancy Gathungu have initiated an audit into pending bills.
The ministry is also drafting an amendment to the Public Finance Management Act, 2012 to give the ministry leeway to withhold disbursement of funds to non-compliant counties.
“Failure to clear pending bills is not prudent management of finances and one of the roles of the Treasury is to ensure prudent use of public finance,” he said.