The State is betting on its Treasury Single Account (TSA) system to end the discriminatory payment of pending bills that have for years plagued contractors owed billions of shillings by counties.
TSA is a unified structure of government bank accounts that enables the consolidation and optimum utilisation of government cash resources.
National Treasury Cabinet Secretary John Mbadi said on Thursday that the platform directly links invoices to budgets, helping seal a loophole that rogue officials at counties have used to cherry-pick which contractor to pay, including fictitious bills.
“The implemented TSA directly links invoices to specific budgets submitted by ministries and departments amongst other enhanced features,” Mr Mbadi said on Thursday.
“These reforms have substantially enhanced the efficiency of government Exchequer operations, delivered transparency in Exchequer cash management and ensured that public funds are released only against verified and approved obligations, thus laying the foundation for managing pending bills; there will be no more cherry-picking of payments.”
The cherry-picking of the bills to pay has been blamed on lack of real-time access to the bank accounts in order to monitor how counties clear pending bills using money that the Controller of Budget approves to be released to counties for this item.
Pending bills that counties owe contractors and suppliers surged to Sh19.26 billion in the six months to December last year, deepening the financial woes of businesses at a time of increased operational costs.
The Treasury targets to extend the TSA framework to county governments from July 1, 2026, committing to a plan aimed at tightening control of public cash flows and management of pending bills.
Controller of Budget Margaret Nyakang’o, has in the past raised concerns that most county governments discriminatively pick the pending bills to clear, bringing to the fore the struggles that contractors face getting their money.
Most contractors are also forced to bribe the county officials in order to have their claims prioritised.
Rolling out the TSA to the 47 counties marks the latest move that the National Treasury is betting on to end the nightmare of pending bills across counties and ease cash-flow woes bedeviling businesses.
Failure to pay the pending bills has stifled cash flows for firms and contractors, forcing most of them to freeze expansion plans, lay off staff and also scale down operations in order to remain afloat.
Counties have ignored Treasury directives to prioritise payment of pending bills several times, prompting threats such as withdrawing cash disbursements to those in breach of the orders.
In 2024, the Controller of Budget unsuccessfully sought to be granted real-time access to the bank accounts of county governments in a bid to monitor foul play in the payment of pending bills. But the Treasury and the Central Bank of Kenya declined the request, dealing a blow to efforts to curb flawed payment of pending bills.
Dr Nyakang’o had raised concerns that rogue county staff paid contractors who were at times not in the lists presented to her office for approval.
