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Clear all pending bills, orders Yatani

By Mercy Mwai
Monday, April 26th, 2021
Treasury Cabinet secretary Ukur Yattani. Photo/File
In summary
    • As at June last year, data from the National Treasury showed that pending bills by State agencies stood at Sh450 billion.
    • State corporations were holding Sh285.8 billion of the pending bills at the national government level.

Mercy Mwai @wangumarci

The National Treasury has ordered all Ministries, Departments and Agencies (MDAs) to settle all the pending bills for the financial year 2020/21 following the approval of the supplementary estimates.

In a letter to the MDA’s,  Treasury Cabinet Secretary Ukur Yatani directed the said institutions to submit to his office a report on the status of the pending bills before Friday this week.

“As you are aware, the financial year 2020/21 supplementary estimates number one has been approved by the National Assembly and the revised budget uploaded in the integrated Financial Management System (IFMIS). Accordingly you are required to settle eligible outstanding pending bills without further delays,” reads the letter in part.

 “You are requested to submit your report on the status of the pending bills to the National Treasury latest by 30th April, 2012,” adds the let­ter.

 Yatani said his directive is based on the National Treasury circular on guidelines for implementation of the financial year 2020/21 and the medium-term budget as well as the presidential circular directing that MDA’s prioritise the settlement of all verified pending bills as first charge in their budgets.

The directive comes hardly months after legislators approved the supplementary estimates, which proposed an additional increase of Sh20.22 billion in the recurrent expenditure and Sh59.81 billion in the deve­lopment expenditure.

VAT refund claims

The Budget and Appropriations Committee (BAC) while passing the supplementary estimates directed the National Treasury to settle all pending bills and court awards.

 “A solid solution must be found to sustainably eliminate pending bills and this can only be through enforcement of the Public Finance Management Act, 2012 and the procurement law,” reads a recommendation of BAC

 Last June, the National Treasury set aside Sh23.1 billion  to clear pending bills. Out of the amount, Sh12.1 billion was to settle verified pending bills owed by ministries and departments while Sh10 billion was set aside to pay verified VAT refund claims.

 As at June last year, data from the National Treasury showed that pending bills by State agencies had hit Sh450 billion.

 The arrears that had rolled over to the financial year the National Treasury said amounted to at least Sh448.05 billion, due to the challenge’s brought about by Coronavirus.

Ministries, departments and agencies rolled over Sh334.2 billion that were due by end of the last financial year on June 30, which was an increase from the Sh64.7 billion disclosed a year earlier. 

Pending bills disclosed by 42 counties to the Controller of Budget, on the other hand, amounted to Sh113.85 billion, up from Sh34.5 billion for the year ended June 2019.

 Section 96 of the Public Finance Management Act and Article 225 of the Constitution give the Treasury Cabinet Secretary powers to withhold cash transfers to counties that persistently breach financial commitments.

 According to the Treasury Statistics, State corporations were holding 85.5 percent, or Sh285.8 billion, of the pending bills at the national government level.