TROUBLE FOR DEVOLUTION

Pending bills are holding county development back

Nonpayment has threatened to run contractors out of business

In Summary

• Auditor General holds that figures presented may have been grossly overstated rendering most of them ineligible.

• Governance gaps, weak internal controls and risk management challenges could also undermine efforts to ensure prudent management of public resources. 

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

The high amount of pending bills has adversely affected businesses, especially Small and Medium Enterprises which depend on borrowed funds to start and run their operations.

Nonpayment has threatened to run these enterprises out of business. Some financiers have auctioned their property over failure to service loans in time, rendering them bankrupt.

Ironically, some have also lost contracts entered with the county entities over non-performance, further plunging their ventures into financial crisis forcing them to close shop. The Office of the Auditor General, in its recent audit of pending bills, holds that the figures presented may have been grossly overstated rendering most of them ineligible, consequently recommending suspension of their payment using current financial year funds.

Contradicting data, failure to avail proper supporting accounting documents, non-compliance with Public Finance Management and Public Procurement Laws were among key factors that informed the recommendation.

Governance gaps, weak internal controls and risk management challenges could also undermine efforts to ensure prudent management of public resources and compliance to International Public Sector Accounting Standards.

The disparity between data retrieved from the IFMIS and that provided by officers could be a pointer to lack of synchrony in operations between the county Treasuries and departments as well as poor administration of the centralised payment system.

As disinterest grows over the bid for tenders, counties should ensure transparency and prompt payment for services provided to foster service delivery and economic development.

 

Homa Bay