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Agencies told to pay Sh30b debt to suppliers

BUSINESS
By Dominic Omondi | November 21st 2018

State agencies had not paid suppliers close to Sh30 billion by the end of June 2018, leaving a number of businesses with serious cash flow problems.

A new quarterly report by the National Treasury noted that pending bills by the national government by the end of financial year (FY) 2017/18 amounted to Sh29.3 billion.

Treasury has instructed the ministries, departments and agencies (MDAs) to fast-track payment of the outstanding amount. 

Raised red flag

“The Government has prioritised clearance of all pending bills. In this respect, MDAs have been directed to settle pending bills as a first charge in the FY 2018/19 budget,” reads part of the Quarterly Economic and Budgetary Review for the financial year period ending September 30, 2018.

Both the national and county governments have accumulated massive pending bills, with the 47 devolved units reported to owe suppliers Sh99 billion as at the end of June this year.

However, with some of the agencies embroiled in graft allegations, there are concerns that a good chunk of the pending bills could be fictitious. Senators have raised the red flag over the outstanding amount.

“We are convinced part of the Sh99 billion pending bills could be a liability for taxpayers and is not valid. It would be proper to have a probe on the bills conducted by the Directorate of Criminal Investigations,” said Senate County Public Accounts Investment Committee Chairman Moses Kajwang.

The Institute of Certified Public Accountants of Kenya has also expressed concern about the ballooning pending bills by both the national and county governments, saying it pointed to reckless expenditure and poor planning.

“The figures indicate a trend of reckless expenditures in awarding contracts and local purchase orders without consideration to the funds’ availability,” said ICPAK Chairman Julius Mwatu. “Consequently, this status stifles business enterprises, affects private sector growth and job creation.” he added.

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