Pending bills committee gets extension

The National Treasury has extended the term of the committee that has been auditing pending bills to December 2025, a further indication that businesses that are owed billions of shillings by different state entities will have to wait longer. 

The government and county government owed suppliers of goods and services Sh701.64 billion as of June 2025, the biggest chunk owed by national government entities at Sh524.84 billion while counties owe Sh176.80 billion. 

Treasury in a gazette notice said it had extended the term for the Pending Bills Verification Committee to December 31, 2025. The committee was formed in September 2023 and was initially expected to give the Ministry a report within one year but the term has severally been extended. 

The committee, chaired by former Auditor General Edward Ouko was mandated with vetting of pending bills, giving the government a clearer picture of what were legitimate claims as well as recommendations on how to go about clearing the claims. 

“It is notified for the general information of the public that the Cabinet Secretary for the National Treasury has extended the term of the Pending Bills Verification Committee, with effect from the 1st April, 2025 up to the 31st December, 2025,” said Treasury CS John Mbadi in the September 19 notice.

A recent report by the Controller of Budget (COB) shows that pending bills by the different ministries, departments and agencies (MDAs) and state corporations increased to Sh524.84 billion in the year ending on June 2025 up from Sh516.27 billion recorded in June 2024. 

According to the report by COB, of the Sh524.8 billion owed as pending bills by the national government, Sh404.33 billion (77 per cent) is owed by state corporations and Sh120.51 billion (23 per cent) by MDAs. 

This is in addition to another Sh176.80 billion owed by county governments. 

According to COB, pending bills by the counties reduced by three per cent from Sh181.98 billion in the 2023/24 financial year following the reconciliation of pending bills in Nairobi County, which decreased by Sh39.78 billion. 

Nairobi still had the largest stock of pending bills, which stood at Sh86.77 billion, despite the huge drop following the clean up. The county’s pending bills stood at Sh118.44 billion in June 2024.

COB noted that the impact of the money outstanding has had on contractors and supplies is immense, with many of them being forced to scale down their operations or even close shop.

“The accumulation of pending bills restrains business cash flows, resulting in liquidity constraints, especially for Small and Medium-sized Enterprises (SMEs), as they have to endure the long wait to settle overdue payments,” said COB in a report on 2024/25 budget implementation by the national government.

“This may force SMEs to either scale back operations, lay off workers, or shut down operations.”

COB called for recognition of pending bills as public debt. 

Treasury had in September 2023 formed the Pending Bills Verification Committee but the Committee is yet to give its final report and recommendations to the ministry two years later. 

It was initially expected to scrutinise pending bills within one year and handover its report by the end of September 2024. The Committee’s term was extended by six months to March 31 this year.

When he delivered this year's budget speech in Parliament on June 12, Treasury CS Mbadi said the committee would hand over the report by June 30, 2025. 

In a preliminary report to Treasury, Mbadi said the committee received a total of 65,627 pending bill claims valued at over Sh571.6 billion. 

As of June, he said, the committee had analysed 57 per cent of the claims received, valued at Sh522.9 billion. Out of this, a total of Sh229 billion has been recommended for settlement. This is less than half of the Sh522.9 billion pending bills analysed, a possible indication of the level of fraudulent claims but also the level of penalties imposed by firms on government owing to delays in paying them. 

The COB in its latest report noted that penalties and interests on pending bills stood at Sh25.28 billion as at June 2025.

Treasury has recently said some of the verified pending bills owed to road contractors have been paid. This followed the government's borrowing of loans using the Road Maintenance Levy as collateral, a move that kicked up a storm as a section of Kenyans protested the move.

Treasury said Sh60 billion had already been paid to road contractors.