No budget approvals without pending bills payment plans, CoB warns

All counties and State agencies will be required to first submit their payment plans for pending bills, which will be strictly monitored and implemented before approving their budgets for the 2025-2026 financial year, in a move aimed at enhancing transparency and accountability in public spending.

The directive is part of the government’s new guidelines on the usage of funds by county governments, State departments and parastatals.

While appearing before the Senate Finance Committee on Tuesday, Controller of Budget (CoB) Margaret Nyakang’o said her office will prioritise addressing the ballooning public wage bill and pending bills, which continue to strain the country’s financial resources.

Nyakang’o emphasised that her office would enforce measures to ensure government institutions work towards achieving a wage bill to revenue ratio of 35 per cent by June 30, 2028.

“We now have a section in our reports where we shall be doing reviews of the wage bill on a quarterly basis,” she said.

As part of the new guidelines, the CoB’s office will conduct quarterly reviews of emoluments allocated to personnel in all entities to ensure compliance by both county and national governments.

Nyakang’o also highlighted a shift in how projects will be funded, noting that withdrawals of funds will only be approved after verifying the type of projects being financed.

“The fiscal policy provides funds to complete ongoing projects. It has elaborated on the funding of ongoing projects, and only those with net positive returns will be funded mid-term,” she said.

Addressing the issue of unpaid debts, Nyakang’o revealed that the national government is holding Sh524 billion in pending bills, while the 47 county governments collectively owe contractors and suppliers Sh180.5 billion.

She said pending bills increased by 16.6 per cent to close at Sh182 billion by the end of December 2024, as most counties walked back on their own payment plans, heightening the risk of business closures across the country.

At the beginning of the 2024-25 fiscal year last July, most counties submitted payment plans, pledging to clear their arrears by June 2025.

However, in her budget implementation report for the six months to December 2024, Nyakang’o said many counties failed to honour these commitments.

"The delay in disbursing the equitable share for December 2024 and underperformance in own-source revenue contributed to this lack of compliance. The efforts by some county governments to clear their debts remain insufficient," she said.

Nyakang’o has however assured Senators that her office will strictly monitor the payment plans submitted by counties and State agencies to ensure the settlement of outstanding debts before any new budget allocations are approved.

“The government has underscored the plan to pay all pending bills. The policy will mitigate losses suffered by those who have supplied goods and services,” she said.

Other Topics To Read

• Headlines
• National
• pending bills
• Controller of Budget Margaret Nyakang'o
• No budget approvals without pending bills payment plans
• CoB warns