Uasin Gishu Senator-elect Jackson Mandago and his Mandera counterpart Ali Roba plan to make changes in the law to impose sanctions on Treasury officials who fail to remit county resources within the set timelines in a bid to curb the accumulation of pending bills.
The two former governors have been at the brutal end of accumulated debts owed to contractors and suppliers despite the law requiring the Treasury to remit allocation to counties every 15th day of the month, in line with the County Allocation of Revenue Act.
“My foremost agenda as a Senator is to know why money allocated to counties cannot reach on time. I want to ensure that the law is changed to punish the Treasury officials who fail to release cash to pay contractors and suppliers on time,” Mandago said during the swearing-in Thursday.
“I will be exploring ways of amending the law further to eliminate the Treasury’s inordinate delay in ensuring funds get to counties by the set deadline.”
The Treasury allocated counties Sh370 billion in equitable share in the current financial year.
As of April 2022, the county pending bills stood at Sh32.96 billion, despite the law dictating payment of all goods or services being supplied in 60 days.
Treasury statistics show pending bills climbed to Sh504.7 billion at the end of the last financial year in June, a 40.39 percent jump over Sh359.5 billion the previous year, making it the biggest annual jump on record.
Governors have consistently been in a push and pull tussle with Treasury over the delayed release of funds that have resulted in unsettled obligations including payments to contractors of State projects, suppliers of goods and services as well as unremitted statutory deductions like payroll taxes, pension, and medical cover contributions.
The majority of counties continue to accumulate unpaid bills despite the Treasury repeatedly issuing circulars to State entities from 2019 to prioritize payment of debts, especially to contractors and suppliers to support economic growth and sustain jobs.
In May, Cabinet Secretary Ukur Yatani revealed the Treasury was considering drafting a legal framework that would penalize accounting officers for failure to honor verified bills for goods supplied or services rendered to State entities as a first charge.
“Government is exploring legal mechanisms to resolve the issue of pending bills,” Treasury officials wrote in the Budget Policy Statement (BPS) for 2022. “The accounting officers will be compelled to clear pending bills and failure to do so, penalties will be charged against the accounting officers.”
The Association of Public Sector General Suppliers said it will be seeking a legal interpretation on how the mounting pending bills will be paid by the national government and county authorities, which took power after the August 9 General Election.
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