County governments closed the financial 2022/23 with pending bills amounting to Ksh 163.8 billion according to data by the National Treasury.
This was a 21.4pc increase compared to the last financial year when pending bills amounted to Ksh 134.9 billion.
According to the Draft 2023 Budget Review and Outlook Paper, out of the total amount of unpaid funds owed to various suppliers and contractors, pending bill accrued by the County Executive amounted to Ksh 163.1 billion while the County Assemblies reported unpaid bills totaling Ksh 1.7 billion as at the close of FY2022/23.
“There is need for a comprehensive study to determine the causes of pending bills by the county governments given that at the end of the financial year, most counties are able to receive their share of disbursements for equitable share and conditional grants,” said Treasury.
For instance as at the close of the last financial year, counties received a total of Ksh 415.8 billion from the National Government comprising Ksh 399.6 billion as equitable share and Ksh 16.2 billion from donors.
The counties also raised Ksh 37.8 billion from own sources of revenue bringing total actual budget to Ksh 453.6 billion.
However total actual expenditure by counties amounted to Ksh 428.9 billion of which actual expenditure on development was Ksh 98 billion while on recurrent was Ksh 330.9 billion.
To ensure the unpaid bills do not rise further, National Treasury expects counties to put measures in place to address the challenges.
“In particular, County Governments are expected to put in place measures to address optimization of own source revenue collection, adherence to fiscal responsibility principles, and clearance of pending bills and follow due procurement processes to ensure issues on ineligible pending bills do not arise,” Treasury noted.
The rising amount of pending bills according to the 2023 BROP is attributed weak linkage between planning and budget formulation and inability of counties to adhere to the public procurement Act.
Of the outstanding bills, recurrent pending bills amounted to Ksh 13.2 billion while development pending bills amounted to Ksh 32.5 billion.
County executives owed a total of Ksh 32.9 billion in unpaid bills for development and Ksh 131.2 billion for recurrent while county assemblies owed Ksh 639.4 million in development bills and Ksh 1 billion in recurrent bills.