Government officials face the sack if they fail to pay pending bills, the National Treasury has said.
In a circular to Cabinet Secretaries and accounting officers, Treasury has threatened punitive action against officials who are yet to settle their obligations despite receiving budgetary allocations from the Exchequer.
The State entity seems to be turning the heat on public offices holding on to billions of payments owed to suppliers.
“State corporations are required to pay all unremitted Sacco deductions as well as loan deductions. This is on top of all statutory deductions including Pay As You Earn, National Social Security Fund, National Hospital Insurance Fund and pension arrears,” said Cabinet Secretary Ukur Yatani in the circular.
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According to the Public Finance Management Act 2012, public officers who authorise unlawful expenditure can be removed from office on grounds of improper conduct.
At the same time, failure to promptly pay approved bills in cases where funds have been provided for the bills attracts a similar penalty.
Mr Yatani has further instructed government accounting officers to make pending bills the first item of expenditure on their budgets for the 2020-21 financial year, putting in limbo spending plans for many public offices.
According to a report by the Auditor General, the government holds on to Sh137 billion in pending bills including Sh42 billion in historical debts. County governments similarly owe Sh100 billion to various entities in both the private and public sectors.
The private sector has tried over the years through the Kenya Association of Manufacturers and the Kenya Private Sector Association to lobby the State to clear pending bills, a big portion of which are owed to Small and Micro Enterprises struggling to stay afloat.
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