Give public finance law a chance to work

After the 2013 General Election, counties were on a frenzy where contractors and suppliers seem to have found the lost key to a candy shop, county governments were dispensing contracts and tenders worth millions of shillings.

I remember meeting a friend in 2013 who was excited about securing a contract for grading a 4km road and he explained that the governor was quick on results even constructing tarmac roads within six months. His excitement was that the moment you are done with one contract at the specified time, you are rewarded with another road contract.

Then came payment time where he was promised it would be cleared after completing the second contract, but the payment never came through. He was given a third contract and told the payment would be made after he completes the third contract and almost seven years down the line he is yet to be paid.

Back in my home county the case was somehow different, folks who never ran any kind of business nor had any financial capacity were the ones scooping contracts and tenders worth hundreds of millions of shillings but delivered air.

Not long, close relatives of the governor were the ones seen driving flashy cars and acquiring prime properties only to draw the correlation that air contractors and suppliers were their proxies.

Bringing the issue home, these two examples are meant to paint the picture of the hot issue about pending bills.

To start with, it is wrong, illegal and unconstitutional for the national government to issue ultimatums to counties that they need to clear their paid bills, counties are not the previous local government to be micromanaged by top-down instructions from national government.

Second, pending bills are a quagmire that needs to be approached carefully because the public stand to lose billions of money. According to the controller of budget reported accumulated pending bills as at June 30, 2018 were Sh108.41 billion but the figure has dropped to Sh34 billion as at June 30, 2019 excluding five counties namely Isiolo, Mandera, Nairobi, Mandera, Marsabit and West Pokot who had not submitted the status of their pending bills.

Nairobi’s pending bills alone are estimated to be above Sh8 billion so the total accumulated pending bills for all counties should be around Sh50 billion, half of 2018 amount. It is not clear what informs the sharp reduction.

Moving on, the simple definition of pending bills is unsettled payment at the end of a financial year and arises where a county or national government fails to settle invoiced amounts for goods and services properly procured and delivered or rendered as at the end of a financial year. It’s important to take note of the words “properly procured and delivered” because any goods and services irregularly procured and delivered should not fall under pending bills ready for payment.

In a special audit report on pending bills conducted this year, the auditor-general has already flagged billions of financial obligations classified as pending bills, some are fictitious whilst others are claims where goods and services were not rendered at all.

Let’s take the case of Nairobi, in the auditor-general’s special audit the county presented pending bills amounting to Sh11.3 billion. The auditor-general okayed only Sh10.8 billion as legible bills but the county had already paid Sh146 million irregularly to ineligible claimers.

And Nairobi is not the only county to have made irregular payment to ineligible claimers.

Looking at Mombasa, there are conflicting figures, in the status report provided to the controller of budget its pending bills stand at Sh4.02 billion as at June 2019.

But in a special audit done by the auditor-general its pending bills were Sh5.3 billion and only Sh3.3 billion was okayed as legible pending bills. So, the national government should stay out of county government pending bills and let the Public Finance Management Regulation take its course or else the taxpayer stands to lose billions of shillings.