The Pending Bills Verification Committee has tabled its first report indicating that the government owes contractors and suppliers Sh110 billion, a major reduction from the earlier estimate of Sh641 billion.
The committee, however, noted that this does not mean the other claims were unjustified since more demands will be considered in another report expected in the next two weeks. Treasury Principal Secretary Chris Kiptoo told the National Assembly’s Finance and National Planning Committee that it has received the first verification report on pending bills.
“We have not factored in the 2024/25 budget provisions for payment of verified pending bills. We have received the first report that indicates that Sh110 billion could be payable,” Dr Kiptoo said.
Without a budget allocation for the pending bills, more than Sh530 billion that is yet to be confirmed is at risk of not being honoured in the next financial year which starts in July.
“We expect another report in two weeks which could give additional amounts. We hope that there is still room for us to provide for payment of pending bills in the budget estimates.”
Dr Kiptoo appeared before the committee chaired by Molo MP Kuria Kimani to defend the Treasury budget for the financial year 2024/25.
Last year, Dr Kiptoo told the Budget and Appropriations Committee (BAC) that State entities owe suppliers and contractors Sh641 billion.
He said State corporations owe suppliers and contractors Sh407 billion, county governments (Sh160 billion), ministries, departments and agencies (Sh18.3 billion).
Dr Kiptoo told the BAC that a budget will be established to clear the huge debts by September this year. The State is planning to partly use the mini-budget to pay contractors amid renewed efforts to settle the more than Sh641 billion pending bills to ease cash-flow woes businesses are grappling with.
Dr Kiptoo told MPs the verification team will present the first list of claims by mid-March, paving the way for including the dues in the supplementary budget. Firms that supplied the State agencies and ministries have been grappling with cash flows due to the non-payment, triggering an uproar from businesses.
At least 160 State corporations had accumulated Sh408 billion pending bills out of which Sh166.99 billion were unpaid contractor dues, Sh115.7 billion owed to suppliers as at December last year.
Dr Kiptoo Wednesday disclosed that the Treasury had pending bills amounting to Sh18,790,770,005 that were submitted to the team assessing the bills.
“This includes material amounts for merchants and GPA/WIBA claims and insurance premiums,” Dr Kiptoo told the committee.
“In addition, the National Treasury has a running outstanding payment of Sh2,216,411,455 in the current financial year owing to budget rationalisation that has been experienced even in the supplementary estimates No 1 for the financial year 2023/24. The total bill is Sh21 billion.”
Parliament in February opened an inquiry into allegations of diversion of payments meant for suppliers blamed for the growing pending bills.
President William Ruto last June formed the bills verification committee that the former Auditor General Edward Ouko chairs to audit liabilities between 2005 and 2022. Dr Ruto accused his predecessor Uhuru Kenyatta’s administration of hiding more than Sh200 billion in pending bills from the current budget.
“When we came to office, we found they had not factored in about Sh130 billion of pending bills and almost Sh90 billion in pending bills from the current budget,” Dr Ruto said.
Mr Kimani demanded to know what the Treasury is doing to pay all verified pending bills.
