Nyakang'o flags counties for soaring pending bills

The Controller of Budget (CoB) has censured counties for accumulating over Sh181 billion pending bills, exceeding wage bills and failing to meet their own source revenue.

CoB Margaret Nyakang’o, in her latest review for the 2023/2024 financial year of the 47 devolved units budget implementation, pointed out that most counties have failed to comply with the law.

The report shows Nairobi, Kiambu, Machakos and Mombasa top the list of counties with high pending bills, according to the report, with Elgeyo Marakwet county recording the least amount at Sh1.4 million.

Nairobi is leading with pending bills amounting to Sh118 billion which represents 65 per cent of the entire stock followed by Kiambu (Sh6.488 billion), Machakos (Sh4.20 billion), Mombasa (Sh4.4 billion), and Kisumu (Sh3.15 billion).

Kiambu has pending bills of Sh6.39 billion and it did not adhere to the pending bills payment plan by the County Treasury. The county also recorded high wage bills accounting for 41.5 per cent of the total revenue, which is above the ceiling provided by law.

Similarly, Dr Nyakang’o flagged Kakamega, Bungoma, Busia, and Vihiga for failing to address the wage bill problem. Bungoma was leading with the highest pending bills in Western region amounting to Sh3.5 billion. In the 2022/2023 financial year, the county recorded Sh2.2 billion in pending bills. 

The county also recorded a wage bill that accounted for 47.9 per cent of the county’s total revenue which is above the 35 per cent ceiling provided by the Public Finance Management (PFM) Regulations Act of 2015.

Nyakang’o also said Governor Ken Lusaka’s administration posted an underperformance of its own source revenue at Sh439 million against an annual target of Sh868 million representing 50.6 per cent of the annual target.

Kakamega is also grappling with soaring pending bills amounting to Sh1.8 billion despite receiving Sh11.8 billion from the national government, and Sh787 million as additional allocations. “In the 2023/24 financial year, Kakamega county assembly settled pending bills amounting to Sh72m,” read the report in part. 

The CoB report indicates that despite the county having Sh14.81 billion available in the 2023/24 financial year, the county treasury did not adhere to the payment plan for pending bills.

“The county recorded Sh1.35 billion as its own source revenue against an annual target of Sh2.20 billion representing 61.3 per cent of the annual target,” the report reads.

Additionally, the county executive spends Sh6.47 billion on staff compensation, Sh3.27 billion on operations and maintenance, and Sh2.8 billion on development.

Data also shows the 26 committees in the Kakamega county assembly spent Sh129 million on sitting allowances for the 86 MCAs and the speaker against the annual budget allocation of Sh135 million.

Busia is also grappling with monstrous pending bills, which amounted to Sh1.42 billion. Their own source revenue also underperformed at Sh369 million against an annual target of Sh649 million.

At the beginning of the 2023/24 financial year, Vihiga County had a stock of pending bills amounting to Sh1.47 billion comprising Sh678 million for recurrent expenditure and Sh789 million for development activities.

The county only settled pending bills amounting to Sh515.56 million leaving an outstanding amount of Sh952 million exclusive of bills incurred during that financial year.

Nyakang’o urged the counties to address pending bills and ensure genuine bills are paid promptly in the coming financial year.  She adds, “The counties should address their own source revenue performance to ensure approved budgets are fully financed.”

However, for the four counties to meet their own source revenue, the Controller of Budget’s office recommended implementing austerity measures to ensure that expenditure commitments are aligned with available revenue.

According to the Commission for Revenue Allocation (CRA) commissioner Hadijah Nganyi, the 47 counties have the potential to collect Sh216 billion instead of Sh60 billion, which they collected in the last financial year. 

“Pending bills increased due to weak linkage between planning and budget formulation and inability to adhere to the Public Procurement Act,” Nganyi noted. 

She added, “Counties should also seal leakages and automate their collection systems to boost revenue.”

Siaya and Homa Bay counties are also struggling with huge pending bills amounting to Sh761.29 million and Sh1.69 billion respectively at the beginning of the Financial Year 2023/2024.

In the FY 2023/24, Governor James Orengo’s administration settled pending bills amounting to Sh457.34 million, which consisted of Sh194.54 million for recurrent expenditure and Sh262.84 million for development programmes.

“Therefore, as of the end of Financial Year 2023/24, the outstanding amount was Sh303.91 million. However, the reported pending bills did not include those incurred in the FY2023/24,” read the report.

The county assembly of Siaya reported outstanding pending bills of Sh12.67 million as of June 30, 2024. Nyakang’o asked the county government to enforce compliance with the payment plan.

In Homa Bay, an outstanding amount of Sh739.12 million was reported at the end of fiscal year under review. This however, does not include unpaid bills for the 2023/24 financial year.