The National Treasury has directed all public entities to prioritize payment for ongoing contracts and refrain from initiating new ones in a renewed effort to curb the country’s ballooning pending bills.
In a circular issued to accounting officers, Cabinet Secretary for National Treasury and Economic Planning John Mbadi emphasized the importance of adhering to contractual obligations to avoid the accumulation of unpaid bills.
“Accounting Officers are therefore required to service the continuing contractual obligations as per the contract agreement to avoid the accumulation of expenditure arrears,” Mbadi stated.
The directive comes as the government continues to verify pending bills in preparation for payment. According to the Treasury, the Pending Bills Verification Committee, established in September 2023, has thus far cleared Ksh 229 billion for settlement out of Ksh 522.9 billion verified obligations.
In addition to enforcing contractual compliance, the Treasury has also ordered strict adherence to financial accountability guidelines. Accounting officers must now conduct monthly bank reconciliations for each account held and submit the reconciliation statements to the National Treasury and the Office of the Auditor General by the 10th of the following month, in line with the Public Finance Management Act, 2015.
The Treasury has further instructed that all standing and temporary imprests be surrendered before June 30, 2025, warning that any unreturned funds will be fully recovered from responsible officers.
These measures are part of the government’s broader fiscal discipline framework aimed at improving public financial management and restoring trust in the government’s ability to meet its obligations to suppliers and contractors.
Written By Rodney Mbua
