The powerful Senate watchdog committee has termed ballooning pending bills in nearly all the 47 counties as a serious crisis and a threat to devolution
Pending bills arise when a government entity fails to settle invoiced amounts for goods and services properly procured and delivered, or rendered at the end of a financial year.
However, time and again, the Senate Committee on County Public Accounts and Investments (CPAIC) says devolved units have found themselves facing cash deficits as a result of myriad factors, and are unable to honor the requisite payments.
Some of these factors, according to the committee, include delayed transfers from the national government, own-source revenue shortages, disputed payments, and delayed legislation such as the recent senate stalemate on revenue sharing formula.
“Some of the pending bills are inherited from the previous local authorities and other administrations, many of which are under dispute,” the committee chaired by Kisii Senator Sam Ongeri says in its report in the Senate on Tuesday.
“Sometimes, pending bills together with debt repayment is attributed as a failure by Exchequer to release funds on time,” the report adds.
The committee tabled its report after auditing the county executive book of accounts for the Financial Years 2015/2016, 2016/2017 and 2017/2018.
In 2017/18, pending bills increased by 295 percent to Sh108.4 billion from a previous average of Sh36.7 billion from the last three years.
This increase was driven by an accumulation in recurrent expenditure pending bills from Sh9.2 billion in FY 2014/15 to Sh80.4 billion in FY 2017/18 linked to increased government spending and delays in exchequer releases.
The Exchequer delays arose due to a prolonged electioneering period which dampened the efforts of collecting the targeted amount of revenues thus unable to fully finance the budget.
The nine-member panel has now recommended that pending bills form the first charge in the county’s budget of the successive financial year.
“The county governments should prepare a debt management strategy every financial year and that the Auditor-General undertakes a special audit to verify the authenticity of the pending bills,” Migori Senator Ochillo Ayacko said, adding that pending bills hinder the growth and development of counties.
Senator Ayacko, who is the vice-chair of the committee, opined that it is sad that county staff use the pending bills to conceal the fraud.
“All these things relate to the performance of a county executive and create a situation where the public never gets value for the money they have been taxed and has been allocated to counties,” he added.
Another threat to devolution, according to the Migori lawmaker, is uncollected land rates, rent properties, and utility bills.
The lawmaker said the non-collection of these items and failure to collect local revenue leads to many things, including pending bills.
“It is something that every county could not explain. I can report that no county was able to collect local revenue they had proposed or budgeted to collect,” Ayacko said.
The senator said the explanations given by the majority of the counties on their failure to meet own-generated revenue targets were eerily similar.
The senator said county executives and county assemblies had also flagrant non-compliance to relevant laws including the Public Finance Management (PFM) Act, 2012, the Public Audit Act, County Government Regulation and the Procurement and Asset Disposal Act.
“A look at the county executives and county assemblies who appeared before the Committee, there is an indication that it would be accurate to describe them as serious violators of the law,” he said.
“If you look at the number of pieces of legislation that they were infracting and violating; in fact, a strict push for compliance with the legislation and enforcement of those legislations, we would have quite a number of executives and management of county assemblies in jail,” he added.
He lamented that despite the Senate and National Assembly flagging and identifying the perpetrators, investigative institutions had not performed to the expectation of the nation.