Can’t pay won’t pay: Why county is unwilling to pay contractors, suppliers Sh3 billion bills

Nakuru Governor Lee Kinyanjui (right) takes over from Kinuthia Mbugua on August 21, 2017. [Suleiman Mbatiah, Standard]

Some contractors and suppliers demanding Sh3 billion from the County Government of Nakuru have no sufficient documents to support their claims.

According to a damning audit report handed over to Governor Lee Kinyanjui last week, only pending bills amounting to Sh722 million of the Sh3 billion were authentic.

The report shows claims amounting to Sh1.2 billion were partially supported by documentations.

The report, to be made public this week, paints a picture of a county government that ignored procurement laws, violated the Public Finance Management Act and engaged in massive corruption.

“Most pending bills lacked crucial records such as engineers report/certificates, project inspection reports, and joint measurements among others,“ read part of the report dated January 8, 2018.

“The pending bills are also linked to failure (by the county government) to adhere to budget timelines as provided in the Public Finance Management Act/ Regulations,” the report  further states.

Since inception of devolution, contractors and suppliers across the 47 counties have been crying foul over delayed payments for goods delivered and services rendered.

In Nakuru County, some debts date back to the 2013/14 financial year.

When Kinyanjui took office in August last year, he promised to audit the pending bills, fearing the county government might have accumulated debts in illegal transactions.

Inflated bills

Before jetting out of the country last week for an urban-housing conference in Malaysia, Kinyanjui told Sunday Standard the audit had to be done to ensure only genuine suppliers and contractors are sorted.

“The county government is committed to meeting all its obligations with regard to pending bills,” he said.

But the audit report on pending bills has revealed cases of highly inflated bills, fictitious deliveries and conflict of interest.

In a clear case of conflict of interest, a company belonging to a lawyer engaged by the county government was awarded work amounting to Sh49 million.

His company is among the many that has threatened legal action should the county administration fail to settle the pending bills.

Another notable transaction that the audit flagged was the payment demanded by a company belonging to a spouse of a famous lawyer seeking payment of Sh20 million for supplies that were never delivered.

According to the report, the documents provided were fictitious and the assets supplied could not be traced at the county offices or stores.

Another intriguing finding is the demand for payment of Sh8.6 million from all the departments that were supported with photocopies of the original documentations.

The auditors noted that original documents were never availed during the verification exercise.

“The use of photocopied records to support payments claims could be as a result of recycled payments,” part of the report stated.

Some of the contractors and suppliers demanding Sh22.8 million might have inflated the cost of goods supplied or services rendered.

Departments on the spot

“Some items in the pending bills were procured at exorbitant prices while others could not be physically traced to various offices. Some of these are documented in various previous audit reports on pending bills, “reads the 700-page report.

The departments on the spot are education, social services, sports and culture, lands and housing, environment and water and office of the governor.

The auditor noted that the county government would have lost Sh522.8 million in a syndicate invoices claiming payments were raised before the purchase order were generated and issued.

“In some cases, purchase orders were issued before agreement while in other circumstances, letters of acceptance were dated before the letter of notification of awards,” the auditor noted.

The audit further unearthed that claims amounting to Sh69.7 million forwarded for scrutiny were not included in the pending bills schedule as at June 30, 2017. Pending bills in the department of land, housing and physical planning were understated by Sh263.3 million.

Kinyanjui said genuine claims would be settled after further verification of documents, but his government will not honour pending bills that seek to defraud the public.

The audit, which took more than six months to complete, unearthed demands for payments amounting to Sh656 million but whose corresponding documents were never availed for scrutiny.

The auditors recommended that payment to such claims should not be made before the claimants avail the documents for verification.

The chairman of contractors in the county Bernard Mutahi expressed optimism that the new administration would rectify the mistakes.