A new report by the Controller of Budget shows the 47 counties — executives and assemblies had not paid bills of Sh153 billion as at June 30.
Of these, Sh151 billion are owed by county executives while Sh1.3 billion is owed by county assemblies.
In terms of vote heads, Sh131 billion is for development projects, Sh22 billion is for unpaid suppliers of goods and services.
The figures demonstrate the dilemmas facing the 47 county chiefs, especially the new ones who have campaign promises to fulfil, as they must first settle the bills before engaging in other ventures.
Nairobi Governor Johnson Sakaja has inherited pending bills of Sh99 billion, accounting for 64.7 per cent of the pending bills stock.
Kiambu Governor Kimani Wamatangi inherited pending bills of Sh5.3 billion. whereas Mombasa’s Abdulswamad Nassir is facing bills of Sh5.2 billion inherited from former Governor Hassan Joho.
Other high pending bills portfolios are held by Wajir at Sh3.4 billion, Trans Nzoia at Sh2.8 billion, Kwale Sh2.6 billion, Turkana Sh2.3 billion, Embu Sh2.2 billion and Murang'a Sh2 billion.
Busia Governor Paul Otuoma inherited bills amounting to Sh1.8 billion whereas Kisumu’s Anyang' Nyong'o crossed into the new year with Sh1.9 billion in debts.
Kitui is yet to pay Sh1.6 billion, followed by Kisii, which is yet to pay bills of Sh1.5 billion, the same as Kilifi, followed by Garissa at Sh1.4 billion.
Nyandarua crossed into the new financial year with Sh1 billion unpaid supplies, the same amount for Taita Taveta and Isiolo at Sh977 million.
Counties with less than a billion but more than Sh500 million include Tana River (Sh970 million), Homa Bay (Sh882 million), Laikipia (Sh855 million), Nakuru (Sh805 million) and Samburu at Sh789 million.
Makueni owes suppliers Sh657 million, Sh585 million for Tharaka Nithi, Sh580 million for Uasin Gishu, Sh564 million for Vihiga and Sh500 million Bungoma.
Huge pending bills were identified in the review of county spending for the year ending June 30 as the key challenges hampering effective budget execution in the counties.
The report has also flagged extremely low expenditure on the development budget, under-performance in own-source revenue collection and high expenditure on personnel emoluments.
Several counties were also found to be using manual systems to process their payroll, a situation that has made it hard to weed out the problem of ghost workers.
Controller of Budget Margaret Nyakang'o has restated the requirement for counties to prioritise payment of the bills in the current financial year.
“The OCOB recommends that all pending bills be budgeted as a first charge in the next financial year in line with Regulation 55 (2) b of the Public Finance Management (County Governments) Regulations, 2015,” she said.
In her review, Nyakang'o also flagged weak budgetary control by county Treasuries and use of own revenue at source, contrary to Article 207 (1) of the Constitution.
An earlier report by the CoB revealed that counties only paid pending bills of Sh15 billion; the amount has ballooned to Sh153 billion.
During the recent governor’s induction, the question of the pending bills was deliberated and governors were urged to prioritise the payments.
Deputy President Rigathi Gachagua said it was not proper that the bills problem has persisted. He said non-payment has affected business operations, with adverse effects on the economy.
“The issue of the pending bills that affect business operations and the private sector is of key importance,” Gachagua said. He urged counties to conduct an internal audit of pending bills.
The Deputy President restated that verified bills are budgeted for and a plan of action on their payments was presented to the Nyakang'o team and to Auditor General Nancy Gathungu for further action.
Apart from bills, the new report has also revealed an alarmingly low expenditure on development, most of which were found to be below the threshold of 30 per cent of the county's annual budget.
“County governments should prioritise the implementation of development projects in FY 2022-23 to improve the standard of living for their citizens,” Nyakang'o said.
She added that counties should ensure that spending on development activities meets the minimum set threshold of 30 per cent of their annual budgets.
Nyakang'o said a number of counties were also found to be paying salaries beyond the requirement that the allocation is below 35 per cent of the budget.
Only four counties, namely Mandera, Tana River, Isiolo and Kwale, kept the costs of their salaries within the allowable range.
The Budget controller also criticised unrealistic revenue targets set by counties, calling on them to mobilise their own source of revenue collection.
In their inauguration speeches, a number of governors committed to paying the pending bills within the shortest time possible.
In Mombasa, Governor Nassir has suspended new projects until the pending bills crisis is resolved.
“No new projects will commence until we have a substantive way forward on the completion of old projects and resolving the issue of pending bills,” the governor said.
Kiambu’s Wamatangi, during his inauguration, said his team would look into the bills and settle them within one year.
“We will ensure all the monies are paid. We will call the contractors and suppliers and agree on the modalities of settling the pending bills,” the governor said.
A task force appointed by Murang'a Governor Irungu Kang'ata started reviewing the pending bills on Thursday. The team will look into the debts accrued in the past two financial years.
The pending bills crisis is not unique to counties. A separate Controller of Budget report revealed the total outstanding pending bills accrued by Ministries, State Departments, and Agencies (MDAs) were Sh49.2 billion as of June 30 this year.
Atop the list is Sh14.6 billion owed to National Youth Service contractors and suppliers and another Sh10 billion to the Crops department.
This is separate from nearly Sh500 billion owed by State Owned Enterprises (SOEs), worse off since they reflect the economy's downward trend.
(Edited by V. Graham)
