The Crisis of Pending Bills in County Governments – Who is to Blame?

County governments across Kenya are grappling with an escalating crisis of pending bills, a situation that has negatively impacted businesses, service delivery, and economic growth at the grassroots level. These unpaid bills, running into billions of shillings, have been a recurring challenge since the inception of devolution, raising concerns about financial mismanagement, inefficiencies, and lack of accountability within county administrations. (As at June 2024, County Governments Owed suppliers a whopping Ksh. 200B).

Pending bills refer to payments owed by county governments to suppliers, contractors, and service providers for goods and services already delivered. The Office of the Controller of Budget and the Auditor-General have consistently flagged the rising backlog of pending bills, warning that many counties are failing to meet their financial obligations. In some cases, suppliers have been forced to shut down businesses or lay off employees due to non-payment, further exacerbating economic hardships.

The reasons behind the accumulation of pending bills are varied. Poor financial planning and budgeting have led many counties to commit to expenditures without ensuring that funds are available or budgeted appropriately. Delays in the disbursement of funds by the National Treasury further complicate the situation, affecting counties’ ability to settle debts on time. Corruption and mismanagement within county administrations have also played a significant role, with some officials deliberately withholding payments or engaging in procurement irregularities that lead to inflated bills or ghost suppliers. Additionally, excessive wage bills consume a significant portion of county budgets, leaving little room for development projects and supplier payments. Political interference, especially during transitions in county leadership, also contributes to the crisis, with new administrations often refusing to honor contracts awarded by their predecessors.

The impact of pending bills is severe and far-reaching. Many small and medium enterprises that supply goods and services to county governments suffer financial distress, leading to reduced economic activity and job losses. Public service delivery is also compromised, with essential services such as healthcare, education, and infrastructure projects stalling due to non-payment of contractors and suppliers. The legal battles that arise from these disputes further strain county resources, with suppliers resorting to litigation to demand their dues, leading to costly settlements that burden taxpayers. Moreover, the persistent failure to clear pending bills erodes public trust in county governments, raising questions about their ability to manage public resources effectively.

Addressing this crisis requires decisive action from county governments and relevant authorities. Strict budgetary discipline must be enforced to ensure that counties only commit to expenditures that have been budgeted for and approved. The National Treasury must ensure timely disbursement of funds to facilitate prompt payments. Strengthening financial oversight and accountability is also crucial, with institutions such as the Controller of Budget and the Auditor-General playing a more proactive role in monitoring county expenditures and taking action against mismanagement. The adoption of e-procurement systems can enhance transparency and reduce opportunities for corruption. Furthermore, counties must prioritize the clearance of outstanding pending bills before undertaking new projects, ensuring that businesses and service providers are not left in financial ruin due to non-payment.

The issue of pending bills in county governments remains a significant challenge that requires urgent intervention. Without proper financial management, accountability, and timely action, counties will continue to struggle with unpaid debts, affecting both service delivery and economic development. It is time for county leadership, the National Treasury, and oversight bodies to step up and find sustainable solutions to this crisis. The public must also demand accountability, ensuring that counties prioritize financial prudence over political expediency. If devolution is to succeed, fiscal discipline and responsible governance must be at its core.

What do you think? Should county governments be held more accountable for pending bills? Share your thoughts with us.