County governments are facing fresh scrutiny after a parliamentary committee raised concern over the growing pile of unpaid bills and weak financial disclosure, warning that the true size of liabilities may be higher than what has been reported in official records across counties.
A report by the Senate County Public Accounts Committee has highlighted gaps in the management of debts owed by counties, pointing to what it says is a widening financial pressure point in devolved units.
The committee noted that the situation cuts across multiple counties and continues to worsen due to poor record keeping and delayed payments.
“The Committee observed with concern that the accumulation of pending bills (trade and other payables) remains a pervasive problem. The total quantified liability from pending bills across the 15 counties for the FY 2024/2025 is at least Sh. 32.3 billion.”
The committee further warned that the actual obligation could be higher than the reported figure due to missing records and poor reconciliation of accounts. It stated that verification challenges remain a major gap in financial reporting.
“A substantial portion of this debt is unsupported, long-outstanding, and unreconciled, rendering the true liability potentially much higher.”
It also flagged cases where counties have continued to accumulate large unpaid amounts over long periods, with some bills remaining unsettled for more than a year.
“Many counties have payables exceeding Sh.1 billion, with significant portions outstanding for over 365 days.”
The report further noted that weak documentation practices have affected the reliability of financial statements submitted by county governments, making it difficult to confirm the accuracy of reported figures.
“The failure to provide proper ageing analyses and supporting documentation for these payables renders financial statements inaccurate and unverifiable.”
To address the situation, the committee has proposed strict timelines and stronger accountability measures aimed at improving payment discipline and financial management at the county level.
“Trade payables due for more than 365 days be considered indicative of poor financial management, and the County Executive must provide an actionable payment plan to the Controller of Budget (CoB) within ninety (90) days of the adoption of this report.”
The report further directs counties to prioritize essential obligations, especially those affecting workers and statutory bodies, within strict timelines once payments fall due.
“All county governments must prioritize the payment of verified pending bills owed to staff, statutory deductions (KRA, NSSF, NITA), and pension funds within ninety (90) days of the payables becoming due, as these constitute a first charge.”
At the same time, the committee has recommended investigations into possible misuse of funds linked to pending bills, calling for action by anti-corruption agencies.
“The Ethics and Anti-Corruption Commission (EACC) to investigate pending bills, particularly those owed to staff and statutory bodies, to establish whether funds due were retrieved from the County Revenue Fund and, if so, how they were utilised, with a view to recommending prosecution of liable persons.”
The Controller of Budget has also been directed to take county efforts in clearing old debts into account when approving future government spending releases.
It “is directed to consider a county's efforts to clear inherited pending bills as a key factor when approving exchequer releases.”
In addition, the committee has insisted on compliance with public participation rules during the preparation of supplementary budgets, warning of consequences for failure to adhere to the law.
''County Governments shall conduct public participation while formulating supplementary budgets, failure to which the controller of Budget shall not approve the supplementary budget and the office of the COB and the Senate will monitor compliance and apply sanctions if payments plans are not honoured.''
The report concludes by warning that counties failing to follow approved payment plans risk facing funding restrictions, including possible withholding of future budget disbursements.
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