County governments have been urged to set realistic own-source revenue targets and align their procurement plans to cashflow projections to free themselves from the pending bills burden.
Controller of Budget Agnes Odhiambo said counties also need to ensure all pending bills are properly budgeted in the ensuing financial year.
“Pending bills should be a first charge to the budget,” she said during the Intergovernmental Budget and Economic Council (IBEC) meeting, chaired by Deputy President William Ruto Tuesday.
Ms Adhiambo regretted that pending bills were resulting to high cost of good and services and eroding investor confidence.
As at June 2018, counties had a pending bill of Sh92.7 billion as compared to June 2015’s Sh37.7 billion.
The Controller of Budget noted that all was not gloomy as 15 counties had already fully budgeted for pending bills in the 2018/2019 financial year, with 23 having partly budgeted for the bills.
Moreover, a total of 34 counties had finalised the verification of their pending bills and factored in payments in the financial year.
Dr Ruto called on the Controller of Budget and the Auditor General to support the remaining 13 counties to finalise and honour their liabilities.
He urged counties to audit their pending bills and “any payments with no issues should be given a priority”.
“If it is payable and you (counties) are not honouring, that is in contravention of the Public Finance Management Act and it is punishable,” said Treasury CS Henry Rotich.
Mr Oparanya urged the Treasury to be releasing funds to counties in time so as to help check the rise in pending bills.