Pending bills: Budget controller wants counties let off the hook

The office of the Controller of Budget (CoB) has asked the National Treasury to pardon at least 15 counties that are at risk of being denied their equitable share of allocation after they failed to settle their verified pending bills.

In a circular dated November 19 2019, the National Treasury Cabinet Secretary Ukur Yatani threatened to invoke Section 97 of the Public Finance Management Ac, 2012 (PFMA) to stop further transfers of cash for the financial year 2019/2020 to affected counties with effect from December 1, 2019.

According to CS Yatani, the earmarked devolved units were in material breach of Section 94 of the PFMA Act since they had not made any significant effort to clear pending bill between July 1 and October 2019.

But appearing before the Senate Committee on Finance and Budget, the Deputy Controller of Budget Stephen Masha reported that since the directive by National Treasury for the 15 counties to clear their pending bills, only Baringo County had compiled.

According to CoB, the county had reported that all pending bills amounting to Sh31.6 million as verified by the office of the auditor-general had been settled as of November 30^th, 2019.

Masha said that more counties had followed suit and made “significant progress” to settle their outstanding bills.

“The decision taken by Treasury Cabinet Secretary was material breach. If we analyze the progress made since the directive and based on the data provided, we can reach a determination that subsequent significant progress has been made,” the deputy COB said.

 “Indeed, a couple of counties has been some progress when we look at the situation county per county basis. The question to be answered is what constitutes a serious material breach,” he added.

The controller has recommended to Treasury that the affected counties are permitted to develop a comprehensive and realistic pending bills repayment plan in line with recovery plan contemplated under Section 99 of the PFMA Act.

“The repayment plan should be discussed and agreed on between the Treasury and the relevant county officials to ensure that all pending bills are paid,” Masha told the Mandera Senator Mahamud Mohamed –led committee.

Mahamud had sought to know from the Controller of Budget, their position on CS’s request to Parliament for approval of stoppage of transfers to counties.

“What is your position on the national Treasury’s intended move to stop funding to 15 county governments, owing to the pending bills,” Senator Mohamud asked.

The 15 counties were: Migori (Sh970 million), Tharaka Nithi (Sh921 billion), Bomet (Sh893 million), Kirinyaga (Sh1.05 billion), Nandi (Sh1.12 billion), Mombasa (Sh4.07 billion), Kiambu (Sh1.56 billion), Garissa (Sh1.57 billion), and Baringo (Sh35 million)

Others are Narok Sh1.8 billion, Machakos (Sh1.1 billion), Nairobi (Sh21 billion), Vihiga (Sh1.8 billion), Isiolo (Sh1.09 billion), and Tana River (Sh1.09 billion).