The Controller of Budget Margaret Nyakang'o.
Senators now want the Controller of Budget, Dr Margaret Nyakang'o, to be given more powers on how counties spend their budgets to cure the menace of outstanding bills that currently stand at over Sh168.6 billion.
The development comes as the lawmakers said they will approach the High Court to seek a judicial review of the Controller of Budget's powers in matters of budget implementation by counties.
This follows the Controller of Budget's latest report, which showed that outstanding county bills currently stand at Sh168.62 billion. The majority are recurrent activities, and some debts date back 10 years.
According to the report, which covers the first quarter of the financial year ending June 30, 2025, pending bills for recurrent activities stand at Sh129.15 billion while that for development stands at Sh34.47 billion.
The report shows that some six counties account for more than Sh143 billion of the outstanding debt, with Nairobi City accounting for the lion's share at Sh121 billion.
Garissa County comes second with Sh6.07 billion, followed by Kiambu (Sh5.90 billion), Turkana (Sh4.78 billion), Machakos (Sh4.42 billion) and Mombasa (Sh3.93 billion).
Some 20 counties saw their stock of outstanding bills increase by a whopping Sh15 billion during the period.
Expressing concern, Migori Senator Eddy Oketch said the Senate should seek a judicial review to give Dr Nyakang'o more control over how counties spend their budgets.
He said without the interpretation, the country will continue to witness skyrocketing outstanding bills that will be difficult to pay.
According to Article 228(5) of the Constitution, the Auditor-General shall not approve any withdrawal from a public fund unless he is satisfied that the withdrawal is authorised by law.
“As a Senate, we should go to the Supreme Court to get a judicial review to make sure that we have the Controller of Budget indeed controlling the budgets of our counties,” Mr Oketch said.
“I urge Senators not to lose sight of this one thing. If we do not address it, pending bills are going to be a growing concern that will make the viability of our counties completely not possible,” he added.
The legislator added that although Article 225 of the Constitution gives the Treasury Cabinet Secretary the power to stop a certain percentage of the Exchequer from going to counties, this cannot be achieved without the Controller of Budget taking control of overseeing the implementation of budgets in the devolved units.
According to Article 225(3), the CS responsible for finance may stop the transfer of funds of not more than 50 percent due to a county government to a State organ or other public body in the event of a serious material breach or persistent material breach of the measures established under the Act.
The suspension provided for in clause (3) shall not exceed 60 days from the date of parliamentary approval.
Counties have always been advised to prioritise the payment of outstanding bills by treating them as the first charge in any budget.
This is in line with the Public Finance Management Act, which stipulates that debt service payments shall be a first charge on the County Revenue Fund.
The provision requires that the accounting officer ensure that this is done as far as possible to prevent the county government from defaulting on its debt obligations.
Another provision requires the accounting officer of a county government entity to budget for completed and signed contracts before embarking on new projects.
However, Dr Nyakang'o has on several occasions accused counties of not honouring payment schedules for outstanding bills they submit to her office.
“If you go to the counties, you will realise that the amount of pending bills is huge. It is something that will bring this country to a halt,” said Narok Senator Ledama Olekina.
“People have killed themselves. Let us make it a priority in the next session that we follow the implementation,” he added.
The Senate Minority Whip said an implementation committee was needed to follow up on any directive for counties to clear their pending bills.
“Very soon, you will find contractors attacking properties owned by the government if these pending bills are not paid. So, it is imperative that we all work together to make sure that we maintain a fiduciary responsibility,” he said.
In May, the Senate passed a resolution compelling the counties to settle all verified outstanding bills of less than Sh1 billion by the end of June and those exceeding Sh1 billion by the end of the current financial year, failing which the counties' equitable share of revenue will be withheld.
