Editorials

Seal loopholes for theft in City Hall supplier payment

city hall

City Hall. FILE PHOTO | NMG

BDgeneric_logo

Summary

  • City Hall's plan to clear more than Sh3 billion owed to suppliers starting this week comes as a relief to many Kenyans.
  • The withholding of payment due to a legal tussle between Nairobi County and former Governor Mike Sonko has put some suppliers out of business, while others have accumulated more debts to cushion them from being auctioned.
  • The county had not been able to spend any cash from the budget after the former governor refused to sign warrants to enable the Controller of Budget to authorise the release of funds.

City Hall's plan to clear more than Sh3 billion owed to suppliers starting this week comes as a relief to many Kenyans.

The withholding of payment due to a legal tussle between Nairobi County and former Governor Mike Sonko has put some suppliers out of business, while others have accumulated more debts to cushion them from being auctioned.

The county had not been able to spend any cash from the budget after the former governor refused to sign warrants to enable the Controller of Budget to authorise the release of funds.

However, as the payments resume to support cash flow and to ensure that the supply chain survives the harsh economic times, it is important to guard against losing a huge part of the Sh3 billion to corrupt deals.

Given the history of theft of public money at City Hall, the suppliers' claims should be audited to seal loopholes that county officials use to pay 'ghost' contractors or to channel the cash into their bank accounts through fictitious companies.

Although the Treasury will be in charge of the payments to ensure transparency, it should let the county government provide the full list of suppliers to be paid and the services they provided.

For a county that owes Sh10.67 billion in pending bills, according to a report by the Auditor-General, the new management has an opportunity to support supplier cash flow by paying promptly.

Services such as garbage collection stopped due to non-payment of Sh1 billion for a year while small-scale traders are owed Sh5 million and below.

For years, counties have not adhered to payment terms, increasing the risks of pending bills.

In the long term, quick and decisive action will ensure a sustainable marketplace for government providers, and also help protect jobs, especially if a fast- track payment system for new and start-up businesses is put in place.

City Hall should also ensure that suppliers qualify on merit so that more Kenyans can benefit instead of the tenders being awarded to employees, their families or friends.