Special committee must expedite audit of pending bills to safeguard economy

The Cabinet recently approved the establishment of a special committee to audit pending bills before payment can commence, leaving contractors and suppliers of goods and services to the national government in a state of uncertainty.

With pending bills amounting to over Sh537.2 billion, it is evident that immediate action is required to address this issue.

The delay in settling these payments has had a severe impact on the financial positions of many individuals and businesses, particularly those who had to resort to bank loans to conduct business with the government.

The repercussions of this delay extend far beyond mere inconvenience. It has led to the deterioration of businesses, strained relationships with suppliers, and, in some cases, even forced enterprises to close down. In extreme situations, contractors have undergone mental anguish to the extent of early death.

Small enterprises, in particular, have been significantly affected, as the lack of timely payments hampers their cash flow and overall operational efficiency.

The establishment of the pending bills verification committee is a step in the right direction.

By auditing liabilities dating back to 2005, this committee aims to bring clarity and transparency to the payment process, ensuring that only legitimate bills are settled.

However, the committee must be cognizant of the need for expediency.

The one-year timeline set for presenting its findings should be seen as an absolute maximum. Every effort should be made to expedite the process and provide prompt resolution for outstanding debts.

Additionally, it is crucial for the committee to propose a mechanism that prevents the recurrence of pending bills in the future.

It is not enough to address the backlog of outstanding payments; proactive measures must be taken to ensure that this issue does not persist.

This entails streamlining payment processes, improving budget planning, and fostering a culture of prompt payment within government entities.

The Controller of Budget office should be facilitated with an automated system that is able to have real-time access to county government accounts to have a full view of the payments once approvals are made to weed out indiscriminately payments of pending bills or payment of fictitious ones.

It is worth noting that this audit mirrors a similar initiative undertaken by former President Uhuru Kenyatta in 2019 for county governments.

The success of that endeavour or lack of it, serves as a precedent, showcasing the outcomes that can be achieved when pending bills are diligently addressed.

The pending bills verification committee should draw lessons from this experience and adapt best practices to suit the national government's context.

It is equally essential to draw lessons from countries that have successfully dealt with similar challenges in the past.

One such country is Sweden, which has implemented a robust system to ensure timely payment to suppliers. In Sweden, public agencies are required to pay their bills within 30 days, and any delay in payment accrues interest to the supplier.

This approach has created a culture of prompt payment and accountability, ensuring that suppliers are fairly compensated for their services and that the government maintains strong relationships with contractors.

Another noteworthy example is Finland, which has established a centralized e-invoicing system for all government transactions.

This system enables efficient and transparent invoice processing, reducing the likelihood of delayed payments and minimizing administrative errors.

By embracing digital solutions and automation, Finland has streamlined its payment processes and significantly improved the overall efficiency of its procurement system.

The lessons from these countries are clear: prompt payment is essential for maintaining a healthy business environment and fostering trust between the government and its suppliers.

The urgency of the pending bills issue thus, cannot be overstated. It is not only a matter of financial obligation but also a critical test of the government's credibility and commitment to good governance.

Swift action is necessary to restore confidence in the system, protect the interests of suppliers, and prevent further damage to the economy.

The writer is a development and public policy specialist.