Counties struggle to pay billions inherited from defunct local authorities

Counties are struggling to pay more than Sh50 billion debts inherited from the defunct local authorities, four years after devolution was adopted.

The pending bills have affected services as there is no clear mechanism on how the debts should be paid, according to Kisii Governor James Ongwae speaking before the Senate Public Accounts Committee.

“Telling a county to pay Sh1 billion can be very difficult. The fakeness of some of the debts is shocking. Somebody asking to be paid Sh7 million for doing nothing,” Mr Ongwae said.

The governor told the committee that the situation has been worsened by delays in releasing funds from the national Treasury.

DIFFICULT CIRCUMSTANCES

“We are yet to receive funds for January, February and March. Counties are operating under difficult circumstances,” said Mr Ongwae, whose Kisii bills amount to Sh963 million.

He said many counties make paying salaries a priority at the expense of development to avoid strikes.

The committee promised to summon National Treasury Cabinet Secretary Henry Rotich, Controller of Budget Agnes Odhiambo and Intergovernmental Technical Relations Committee chairman Prof Karega Mutahi to explain.

Committee chairman Anyang’ Nyong’o and senators Boni Khalwale (Kakamega), Kimani Wamatangi (Kiambu) and John Lonyangapuo (West Pokot) expressed concerns that pending bills inherited from the defunct local authorities must be addressed before the next General Election.

“There are fake pending bills that were fraudulently obtained and run into millions, and there are some doubtful ones and few genuine debts,” Prof Nyong’o said.

He said there is a need for a thorough forensic audit and those found to have claimed money fraudulently should be charged with stealing public funds.

“Services are affected when providers are not paid on time. We must address pending bills so that they don’t spill over to the next government,” said Prof Nyong’o.

UNDISCLOSED ACCOUNTS

Nyamira Governor John Nyagarama, who appeared before the committee, was at pains to explain why some Sh6 million was not disclosed to the auditors.

The committee ordered the auditor-general to investigate further and establish the amount of money that was in the undisclosed accounts and the status of the accounts.

“Until we get the audit of that account, you will be in trouble,” Prof Nyong'o said at Parliament when the committee met the governor over the 2014/15 audit report.

According to the auditor-general’s report, the county government in its financial statements reflected nil balances under deposits and retention accounts.