Suppliers suffer as counties keep bills pending for years

Caleb Wanjawa, a Machakos-based trader, is a distraught man. In 2014, through his company, Calf Holdings, he supplied laptops and software programmes to Machakos County government but he is yet to receive payment.

“It has been tough doing business with the county. I’m owed Sh2.3 million by this county, despite completing the project and delivering the items,” Mr Wanjawa said, adding the delay has affected his firms’ liquidity and profits. 

The businessman has sought the intervention of the Public Procurement Regulatory Authority and the Office of the Ombudsman to have the payment cleared.

In a March 15 letter to Machakos County seen by the Nation, Ms Sarah Muthiga from the Ombudsman said there has been no response from the county on settlement of Mr Wanjawa’s dues.

“Urgently appraise the Commission on Administrative Justice on the current status of the complainant's claim in order to bring this matter to rest,” the letter demands.

Mr Wanjawa’s woes mirror those of many other contractors.

In Taita-Taveta, contractors have decried delayed payments from the county government, leaving them in dire financial straits. According to a recent Auditor-General report, the county government owes over Sh863 million in pending bills. 

Stalled projects

Some of the projects in the county have stalled after the contractors moved out due to non-payment. Some of the major projects that are yet to be completed are the five-bed cintensive care unit at Mwatate Sub-County Hospital, Sh20 million upgrading of Moi Stadium in Voi and the construction of Ngerenyi High Altitude Centre in Wundanyi. 

A spot check at the Moi stadium project revealed that Jedi Contractors had abandoned the site, which has occupied by vandals and the homeless. 

The Taita Taveta Contractors Association said the county owes money from as far back as the first county government that was led by John Mruttu. 

The association’s chairperson Jefferson Mwabili said they have had a huge challenge in getting payments. 

“Some of our members have been auctioned by banks because they took loans but could not pay. Some fell into depression and others have high blood pressure because of debts,” he said.

Last week, the county assembly’s majority leader Harris Keke directed Finance executive Andrew Kubo to furnish the House with a pending bills report. 

“We want to know the status of the county debt because contractors are complaining,” he said.

Mr Kubo said the county plans to pay Sh500 million in the next financial year to contractors.

Pending bills

“We have had a serious problem with the disbursement of funds from Treasury. We are unable to clear all pending bills due to this problem and most of the time we pay in bits,” he said. 

He added that out of the Sh863 million in pending bills reviewed by the Auditor-General, bills worth Sh180 million were declared ineligible.

“We had a meeting with the contractors on Tuesday and we agreed that we will pay in bits because of the financial constraints,” he said.

Apart from the non-payment of contractors, the county government has been struggling to pay its worker’s salaries on time.

In the first quarter of the financial year 2021/22, counties owed suppliers Sh520.73 million. A report from the Controller of Budget indicates the amount comprised Sh68.4 million for recurrent expenditure and Sh452.33 million for development expenditure.

“The public finance management framework requires that pending bills are settled on time as specified in contract agreements to avoid the accumulation of arrears. Failure to make payments when due constitutes a severe material breach of public finance principles as provided under Article 201 of the Constitution and violates the Public Finance Management Act, 2012,” CoB Margaret Nyakang’o said in the report.

Some counties did not report any payments towards the settlement of the bills in the period under review.