15 counties to face cash crunch over unpaid bills
National Treasury Acting Cabinet secretary (CS) Ukur Yattani has sought parliament’s approval to deny at least 15 counties their equitable share of allocation, should they fail to clear their pending bills in line with presidential directive.
In a communication to MPs, National Assembly Speaker Justin Muturi on Wednesday said he had received a message from the CS regarding a request for approval of stoppage of transfers of equitable share of revenue for the financial year 2019/2020 to County Governments.
“Honorable Members, pursuant to the provisions of section 97(2) of the Public Finance Management Act, 2012, the Acting Cabinet Secretary is seeking approval of the House for stoppage of transfer to fifteen (15) County Governments as contained in Circular No.20/2019 dated 19th November, 2019,” said Muturi.
He added: “…the CS has noted that the fifteen (15) County Governments have contravened section 94(1) (a) of the Public Finance Management Act, 2012 by failing to make any efforts at clearing eligible pending bills, thus affecting economic growth and inconveniencing Small and Micro-Enterprises (SMEs) and other business segments at the county level.”
Last week, CS Yatani said that while some 20 counties have demonstrated efforts towards settle the payments for the pending bills; the said counties have persistently failed to pay for goods and services provided by firms in the private sector including small and Micro enterprises.
As a result, he said, effective December 1 the transfers for the 2019/2010 financial year and the transfer of conditional grants will be stopped.
“With regard to the County Governments, a special audit by the Office of the Auditor General (OAG) sometime in the 2018 verified and approved payments of an amount of Sh51.2 billion out of a total Sh88.98 billion pending bills presented for audit, while a total of Sh37.7 billion were to be reviewed further subject to production of full documentation in support of the claim,” the CS stated in Circular No.20/2019 dated 19th November, 2019.
“It’s important to note that these pending bills were for the period after the roll-out of the devolved system of government and therefore do not include pending bills accumulated by the defunct local authorities,” Yatani observed.
Speaker Muturi has referred the matter to the Budget and Appropriations Committee chaired by Kimani Ichung’wah (Kikuyu) for consideration in light of the provisions of Article 225 of the Constitution, and thereafter report to the House on the matter within the set timelines.