Suppliers to wait longer as Cabinet orders pending bills audit

The creation of a special committee to audit the outstanding invoices before payment can commence, thus contractors and suppliers to wait longer as Cabinet orders pending bills audit of products and services to the national government would now have to wait longer to be paid for more than Ksh537.2 billion.
According to a statement from the Cabinet, “the pending bills verification committee will be tasked with the auditing of liabilities for the period between 2005 and 2022.”
Crucially, the committee will suggest a way to halt pending measures in the future. The committee would deliver its final report within a year, it was decided.
The audit, which is similar to what former president Uhuru Kenyatta ordered for counties in 2019, warns that the government’s vendors and contractors will have to wait longer to get paid.
According to Treasury figures, the total amount of unpaid national government bills at the end of March was Ksh537.2 billion, up 23.6% from Ksh434.5 billion at the same time previous year. County-level spending reached Ksh159.7 billion in March.
Between June 2005 and June 2022, the national government had Ksh481 billion in unpaid invoices, compared to Ksh159.9 billion for counties.
The financial situations of many people and enterprises, especially those that used bank loans to conduct business with the government, have gotten worse as a result of the delay in paying pending invoices.
From September of last year, many newly elected governors also began establishing task forces to examine extensive records and even physically inspect the completed projects or provided goods before payment is made.
If the national government follows the same procedure as the counties, the verification process for outstanding bills may entail inviting all vendors and contractors who assert they are owed money to submit claims to the committee.
According to a statement from the Cabinet, “the move is intended to establish the integrity of all bills and protect small enterprises against liquidity insufficiencies.”
Value for money
The county committees examine the invoices, note descriptions of the labor performed, the items or services provided, the dates, and the precise locations.
Then comes quantifying and assessing the value for money, which is followed by acquiring proof of the performance of the services or the delivery of the items.
This implies that suppliers and contractors, many of whom are already dealing with loan defaults, may have to argue with the committee in order to support the legitimacy of the most recent list of outstanding bills.
It will also include representatives from the Kenyan Law Society, the Institute of Engineers, the Institute of Certified Public Accountants, and the Ethics and Anti-Corruption Commission.
During the presentation of the 2023–2024 Budget Statement, Prof. Ndung’u stated that the Treasury will instruct all State bodies to clear pending invoices as a first charge on the Budget after they have been approved by the verification committee.
When a public officer or accounting officer “fails, without reasonable excuse, to pay eligible and approved bills promptly in circumstances where funds are provided for,” it is “improper conduct,” according to Section 74(4) of the Public Finance Management Act, 2012.
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