Mbadi vows to criminalise failure to pay pending bills

Treasury Cabinet Secretary nominee John Mbadi has taken a firm stance on the issue of pending bills, declaring that, if approved, he will criminalise the failure to clear such expenditures.

During his vetting by the National Assembly’s Committee on Appointments on Saturday, he proposed the introduction of a system that aims to eliminate the backlog of pending bills and ensure timely payments, addressing a significant financial challenge facing Kenya.

"What my proposal would be is that we may have to implement a system, possibly through legislation, where the Public Finance Management (PFM) Act mandates that pending bills form the first charge," he told the vetting committee. 

"But above all, I will make sure that we have a system in place that locks anyone who attempts to pay a new bill while ignoring an old one," Mbadi added.

According to him, the system can enforce a "first in, first out" approach by locking out subsequent entries.

"If a bill is supposed to be payable, let it be paid," he added. 

Going further, the former ODM Chairman expressed concerns about the current process of verifying pending bills, which he believes has turned into a method for evading payments.

Despite emphasising that pending bills should be settled, Mbadi also noted that many of the arrears are, in fact, fictitious.

He also suggested that there should not be a specific committee formed to scrutinise and verify pending bills.

Treasury CS nominee John Mbadi appears before the before the National Assembly’s Committee on Appointments on Saturday, August 3, 2024. (Photo: Parliament)

"I know there is a committee in place to verify the country's pending bills. I know it is headed by the former auditor general, Edward Auko. But, Mr. Speaker, I asked myself this question. The pending bills submitted to that committee total upwards of Sh663 billion. 

Mbadi questioned the feasibility of auditing such a large volume of claims in a short period of time.

"How do you have one auditor, even if you have engineers, with a few months to audit that and give you a report?" he wondered. 

"What I'm saying in a nutshell, Mr. Speaker, is that we need to have a system where there is nothing like pending bill verification because it has become a way of just failing to pay up the bills that are owed," Mbadi added.

The Pending Bills Verification Committee is chaired by former Auditor General Edward Ouko.

As of January 31, 2024, a total of 1,537 companies had submitted unpaid pending bill requests to the state worth Sh145.5 billion, according to the Pending Bills Verification Committee. 

The claims were distributed to 38 Ministries, Departments, and Agencies (MDAs).

Out of the 1,537 claims, 309 were for goods, 995 for services, 1,197 for work, and 2 were for employee- or labour-related requests.

The Pending Bills Verification Committee chairperson, former Auditor General Edward Ouko, assured that the public would be well informed of the quantum of the eligible pending bills and the policy recommendations to the government in clearing the bills.