The National Treasury says going forward, disbursement of funds to county governments shall be based on the progress made in the settlement of pending bills.
The counties will further be required to give a monthly status report on all bills paid.
Interior Cabinet Secretary Dr. Fred Matiangi says the government has released enough funds to clear all pending bills.
The National Development Implementation and Communication Cabinet Committee chaired by CS Dr. Matiangi has accused the county governors of using pending bills as a political card.
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He says the county bosses are holding on funds belonging to SMEs who delivered on their tenders years ago.
The CS has directed all county governments with pending eligible bills due to suppliers and contractors as at June 2018 and varied and confirmed by the Auditor General be cleared with immediate effect.
Matiangi said it is unfortunate that the SMEs must survive in a tough economic environment with debt owed to them by counties.
He further stated that the national government has already cleared nine billion shillings and plans to clear the remaining debt are in place.
As at 31st October 2019, only 12 counties had cleared their pending bills. The national government had pending bills amounting to 96.1 billion shillings while the county governments owed 88.98 billion shillings
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