The growing pile of unpaid county bills could become a major burden during the next change of administration, with Auditor General Nancy Gathungu calling on governors to clear debts linked to their time in office before they hand over power.
Gathungu said county governments should not leave suppliers, contractors and other service providers waiting for payment after delivering goods or completing work. She said incoming administrations should not be forced to take responsibility for obligations that were created by previous leaders.
“We have seen a perennial behaviour of leadership coming in and failing to honour obligations of the county,” Gathungu said.
“It is fiscal indiscipline when services have been provided, goods consumed and then failing to pay because the liabilities were incurred by the previous regime.”
Speaking in Nanyuki, Laikipia County on Wednesday, during a stakeholders’ engagement, Gathungu said failure to pay for services and supplies was affecting businesses that depend on county contracts.
She said governors need to know the size of their outstanding obligations and make room for them in their budgets instead of allowing debts to continue building up.
The Auditor General said county leaders should deal with both the liabilities created under their watch and those inherited from earlier administrations.
She warned governors that failing to address the debts before leaving office could expose them to criticism and possible demands for answers from their successors.
“As you exit, check what liabilities you have, budget for them and make sure there is a provision for clearing the liabilities. I do not believe any governor wants to be called back after their exit and make negative headlines because the next governor will be passing all the blame on you,” she said.
The warning comes at a time when county governments are carrying a large financial burden. Suppliers, contractors and other service providers were owed Sh176.9 billion by June 2025.
With counties heading towards another leadership transition after the 2027 General Election, Gathungu said governors should use the remaining period to deal with outstanding obligations rather than leaving them for the next administration.
Laikipia Governor Joshua Irungu said his administration was taking steps to pay pending bills accumulated over the five-year period. He said the county had included funds for settling the obligations in its 2026-27 budget.
Irungu said his administration had not been creating fresh pending bills, adding that some of the outstanding obligations were linked to low collections from the county's own sources of revenue.
He said the county had first focused on debts inherited from the previous administration while making sure new commitments were supported by the revenue available.
The approach, he said, was aimed at stopping the county from building another stock of unpaid bills.
Irungu has recently come under criticism over claims that Laikipia owes contractors and suppliers more than Sh1.3 billion for work and services provided during the administration of his predecessor, Ndiritu Muriithi.
He said the county was working to settle the inherited obligations and was confident that the steps taken would allow Laikipia to finish the current financial year without adding new debts.
Gathungu also turned her attention to the Laikipia county assembly, raising concern over the number of audit reports that remain pending.
She said about 109 audit reports were yet to be dealt with and asked the assembly to work with her office on a plan to clear the backlog before the elections.
“We can assist them in planning together with my technical team, their clerks and the staff of the county executive. We are also looking at other entities such as water companies, municipalities, towns and hospitals,” she said.
Gathungu said delays in acting on audit reports weaken the ability of county assemblies to provide proper oversight and ensure public funds are accounted for.
She called on the assemblies to examine the reports and make recommendations within the time remaining before the elections.
The Auditor General also asked the Senate to concentrate on challenges that affect devolution across the country, including weaknesses in laws, funding and the running of county governments.
She said county assemblies, on the other hand, should continue dealing with operational matters affecting their respective counties.
Gathungu was speaking during a visit to Laikipia as part of her tour of regional offices established after the Office of the Auditor General decentralised its services.
The office now operates 16 regional offices, with Laikipia serving as one of the regional centres. Gathungu said taking audit services closer to counties would improve service delivery and give staff more exposure to different county operations.
She also said the Office of the Auditor General had started an academy in Nairobi and was planning to open satellite training campuses in other areas.
Rumuruti is expected to host the second training centre outside Nairobi after Embu.
Gathungu further raised concerns about gaps in public records, saying poor documentation continues to make audits harder to complete.
Among the problems are failure by public institutions to prepare quarterly financial and budget reports and weak handover arrangements when staff move from one position to another.
She said her office was working with the National Treasury and the Public Sector Accounting Standards Board to improve financial reporting as public institutions adopt accrual accounting.
The changes are expected to improve the quality of financial information available for audits and help public entities keep better track of their obligations.