Market News

Suppliers, counties in race to prove billions in debt claims

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Auditor General Nancy Gathungu. PHOTO | LUCY WANJIRU | NMG

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Summary

  • Counties and suppliers are caught in a race against time to prove the authenticity of debt claims running into billions of shillings by the end of this month.
  • Auditor-General Nancy Gathungu said on Tuesday her office would conduct a special audit of pending bills in all the 47 counties and urged suppliers to present proof of work done and the amount owed to them by May 31.

Counties and suppliers are caught in a race against time to prove the authenticity of debt claims running into billions of shillings by the end of this month.

Auditor-General Nancy Gathungu said on Tuesday her office would conduct a special audit of pending bills in all the 47 counties and urged suppliers to present proof of work done and the amount owed to them by May 31.

“The Office of the Auditor General will be conducting a special audit on pending bills in all the 47 counties. This is therefore to request all the affected suppliers and service providers of the County Governments to furnish the Auditor-General with relevant information for the purpose of the audit,” the Auditor General a said in a notice.

Suppliers and service providers are required to submit documents including supplier registration certificates, contract agreements, delivery notes, invoices, completion certificate, Kenya Revenue Authority pin certificates, local purchase or service order.

As at September 2020, the 47 devolved units owed SMEs over Sh113.85 billion for supplies and services provided despite calls by the National Treasury to clear the debts.

The national government — State corporations, agencies and departments — had pending bills by amounting to Sh346.2 billion as at the period.

County governments have in the past failed to pay goods and services rendered with some bills remaining unpaid for over five years, negatively impacting the businesses as both the Treasury and the governments play blame game on disbursements of funds.

Apart from lack of sufficient documentation to support services or goods provided, the county governments have occasionally pointed to their cash-starved state over disbursement of the equitable share of revenues.

This is coupled with consistent missing of tax revenue collections target over the years, forcing them to rely on debt.