Last week, acting Treasury Secretary Ukur Yatani released a statement on the status of pending bills and its unfortunate that he chooses to play PR, let me respond to some of the weight matters.
First, its the office of Auditor- General that has the last call on who county and national govt should pay. So, when the CS says that historical/contested bills have been referred to the Mutli-Agency Team for “final determination” has the mandate of the Auditor-General been usurped by a colloquial Multi-Agency Team?
At the county level, county governments have established ineligible Pending Bills Resolution Committee which is welcomed because suppliers, contractors and service providers whose bills are classified as ineligible are given a platform to be heard on the issue the Auditor-General raised.
Now, the problem lies in the mandate given to these dispute resolution committees which is “verify and prioritise ineligible pending bills for payments” aren’t they also usurping the mandate of the Auditor General?
The Auditor General in a special audit established that most ineligible pending bills are fictitious or for services that were never delivered at all. So, is Treasury mentoring counties on how to make payments to non-existent projects like the Kimwarer and Arror dams? A pending bill should remain ineligible until when it’s sanctioned by only the Auditor-General.
Second, Treasury is in a hurry to have pending bills settled even if it means breaking the law believing that it provides a better stimulus to the liquidity problem the economy is facing. Newsflash is that the liquidity problem is a result of a cocktail of economic mismanagement from abracadabra budget-making to reckless local borrowing by government, rent-seeking regulatory environment to a six year looting spree; and all that cant be fixed by pending bills.
But even if that was the case, the Presidency should have been the last to meddle in the recruitment of Auditor-General because it’s the office that can fast-track the payments of pending bills and without a substantive Auditor-General no ineligible pending bills can be sanctioned.
So the president rejecting the names forwarded for appointment creates more uncertainty when the Public Audit Act does even not provide for a repeat process on basis that no suitable candidate was found. The law only anticipates a candidate being rejected by National Assembly, then a repeat recruitment is done.
Third, Treasury needs to come down from the high-horse it’s riding. The CS said that as at Monday 23rd December 2019, National Treasury had cumulatively released 112.041 billion to counties which represents July to November counties allocation. But that is just half of the story, Treasury’s pattern or releasing these funds to counties is part of the larger mess, it releases fund per month (the 15th of every month) which doesnt help counties to plan better.
Then comes late disbursement, for example in the last month of FY 2018/2019 Treasury released money at the last week and counties found themselves locked out from appropriating much of the allocation before the year closes.
The Treasury deliberately does this because when counties are locked it will redirect these funds not appropriated towards national governmentt expenditure at the start of the new fiscal year.
Lastly, the CS says Treasury will withhold December and future allocation of counties until they submit returns on payment of pending bills. The CS having been a county governor himself clearly knows that county budgets cannot be altered until two months after first withdrawal of funds.
Now, in the start of this financial year, there was an impasse pitting the National Government and National Assembly on one side against Senate and governors on the other side split on the exact share counties should receive which ended in September.
This means the first withdrawal was in September and altering the budget can only start in December. So what returns on payment of pending bills doesn’t Treasury expect from counties?