Business individuals contracted by county governments and specifically Nairobi County are yet to benefit from President Uhuru Kenyatta’s directive on June 1 requiring Government Accounting Officers to settle all pending payments that do not have audit queries on or before the end of the just concluded Financial Year that ended on 30th June.
The President had on Madaraka Day issued two policy directives meant to remove bottlenecks that had caused a reduction in overall spending and business activity in the economy.
That decree has fallen on deaf ears with hundreds of suppliers and contractors yet to be paid – with just a handful having been paid their dues.
Managing director of Richto Tours and Travel, Bernard Gitonga, who has strong links with a number of counties is now crying foul over mounting unpaid dues owed to him, having been contracted to facilitate their foreign trips.
In an interview with People Daily, Gitonga said that several attempts to reclaim his payments have proved futile with a number of counties yet to honor payments while a good number are claiming to be broke.
“I haven’t been paid for works done dating back to 2017 by several counties and this is negatively impacting on my business and relationship with other clients,” adding that as a result, he has been forced to borrow from fellow business people and close friends to stay afloat in business as the banks are now shying away, terming his case as being ‘risk-averse.’
“I deal with airlines and as is the rule you have to pay them within fifteen days when handling a ticketing contract, so thick and thin you are forced to look for money elsewhere to pay them should counties delay your payments,” he narrates.
In deed this has been a common scenario for most Kenyans contracted by County governments to undertake certain projects on their behalf who are now reeling the negative implications of delayed and sometimes lack of payments by Counties, forcing some suppliers to run into headwinds with local banks and financial institution.
“It is the reason you are seeing so many auction advertisements on daily papers. Banks are forced to auction your most prices assets to recover their loans,” says Joseph Irungu, an independent contractor undertaking infrastructural projects in roads construction.
Available figures by Kenya’s Auditor General Edward Ouko, Nairobi County was one of the leading Counties in settling pending bills and as at February 2019, the county owed its suppliers and contractors Sh10.8 billion, after clearing a Sh954 million bill.
Heaping pending bills have been blamed on first-term governors who are said to have given out contracts at the tail end of their tenure, leaving the incoming county executives with huge pending bills to pay.
On Tuesday this week the Controller of Budget (CoB) Agnes Odhiambo told Parliament that she had written to the counties asking them to process the payments, after CoB cleared part of their pending bill claims, paving way for county government suppliers and contractors to receive payments totaling Sh51.2 billion.
A recent audit of pending bills showed only those amounting to Sh51.2billion out of the Sh88.9 billion outstanding by June 2018 were eligible for payment.
The Treasury on October 30 asked Auditor-General Edward Ouko to carry out special audits of the pending bills, which had reportedly ballooned to Sh108 billion as at June 2018.
Counties presented to Mr Ouko pending bills amounting to Sh88.9 billion, highlighting a difference of Sh19 billion from what they had requested for payment authorization by the Controller of Budget, with the national Treasury later providing Sh240 million for the pending bills audit.
Also to blame is the ongoing push and pull and superiority battle between the Senate and Parliament houses. This fight is having a negative impact on business delivery at the counties and impacting livelihoods on suppliers’ dependents.
The two are yet to decide on the amount to be disbursed to counties.
The row between the Senate and the National Assembly over money to be allocated to counties is yet to be decided by Kenyan courts the devolved units continue to suffer over delayed funds.
The Senate has challenged at least 20 pieces of laws that have been passed and enacted without its input.
The senators want the court to determine that any Bill passed by the National Assembly and assented to by the President without reference to the Senate does not meet constitutional threshold and that they should declared null and void.
The senators have further argued that they will not endorse the Division of Revenue Bill until the figure is raised to Sh327 billion.