Parliament is investigating allegations of diverting payments meant for suppliers blamed for the growing pending bills that stood at Sh646.8 billion as of December last year.
Margaret Nyakang’o, the Controller of Budget (CoB), told the Senate that suppliers were owed Sh408.6 billion by State corporations and semi-autonomous government agencies (Sagas), Sh80.28 billion by ministries, departments and agencies (MDAs) and Sh157.91 billion by county governments.
She told the County Public Investments and Special Funds Committee (CPISF) that the diversion of payments from rightful payees to other suppliers not in the payment schedules had made the pending bills headache worse.
“Some of the key reasons for the huge pending bills is the diversion of payments from the rightful payees to others who are not in the list that I authorise for payments,” Dr Nyakang’o told the committee.
“This happens a lot, especially during transitions to the new administration. Our small research shows that the level of voided transactions in 2022 was 10 times more than the normal levels experienced years before the change to the new administration.”
Dr Nyakang’o told the committee chaired by Vihiga Senator Godfrey Otsotsi that individuals making payments to suppliers of goods and services at both levels of government and at the parastatals have in some instances removed transactions they felt is not serving their interests and left them as pending bills.
She blamed the lack of automation to enable her office to have a “full view” of the transactions once the CoB approves withdrawals from the exchequer.
The CoB does not have real-time access to the accounts, a loophole that counties continue to use in making discriminatory payments to contractors besides lodging fictitious claims.
Dr Nyakang’o said there have been instances where counties have used one payment requisition schedule to make multiple requisitions.
Mr Otsotsi directed Dr Nyakang’o to furnish the committee with information on the use of one payment schedule to requisition for multiple payments.
“This is a very serious matter that we intend to conduct an inquiry. There may be a collusion between some of your officers and county governments to swindle money from counties,” Mr Otsotsi said.
Dr Nyakang’o said the Integrated Financial Management System (Ifmis) is the elephant in the room since many of the problems originate from the Treasury procurement and payment system.
“The linkage between Ifmis and internet banking must be understood. The automation of the processes will mean my office speaks to both Ifmis and internet banking and allows me to view balances before I make approval and monitor spending as paid by the Central bank of Kenya (CBK).
Dr Nyakang’o last week told the National Assembly’s Budget and Appropriations Committee (BAC) that the CBK is yet to grant her office "a full view" of transactions after counties receive the cash.
