By Perez Karisa, June 25, 2026
A new report by Controller of Budget Margaret Nyakang’o has raised fresh concerns over the worsening financial health of Kenya’s devolved units, revealing that more than half of county pending bills are over three years old, pointing to a systemic pattern of delayed payments and abandonment of inherited obligations.
The report shows that total county pending bills have ballooned to Sh172.51 billion, with county governments increasingly failing to settle verified debts owed to contractors and suppliers. Instead, many administrations are prioritising new development projects, leaving older financial obligations unresolved for years.
Controller of Budget Margaret Nyakang’o warns that the trend is undermining both fiscal discipline and public trust in county governments.
“A significant proportion of pending bills continue to remain unpaid for extended periods despite being verified obligations. This reflects weaknesses in expenditure prioritisation and debt management at the county level,” Nyakang’o noted in the report.
The report further highlights that the failure to clear inherited debts is in violation of Regulation 41(2) of the Public Finance Management (County Governments) Regulations, 2015, which requires county governments to prioritise the settlement of existing obligations before committing to new expenditure.
Despite this legal framework, the Controller of Budget notes that enforcement remains weak, allowing counties to roll over unpaid bills from one financial year to the next.
The report identifies a growing trend where incoming county administrations question or suspend previous contracts under lengthy “verification processes,” effectively delaying payments to contractors who have already delivered goods and services.
“Verification processes are increasingly being used as a justification for delaying legitimate payments, even in cases where services have already been rendered and confirmed,” the report observes.
In addition, the report points to political prioritisation of new projects as a major factor driving the accumulation of pending bills, with governors often focusing on visible infrastructure projects that yield immediate political returns while neglecting older debts.
Cash flow challenges arising from delayed exchequer disbursements from the National Treasury also continue to strain county budgets, forcing many devolved units to accumulate fresh operational debts while failing to clear historical ones.
The Controller of Budget also raises concern over weak enforcement of audit recommendations and persistent budget misalignment at the county level, which continues to widen the gap between approved budgets and actual expenditure commitments.
The rising pending bills crisis has had a severe impact on contractors and small and medium enterprises (MSMEs), many of whom rely on county governments for business. Several suppliers are reported to be struggling with liquidity challenges, loan defaults, and stalled operations due to delayed payments.
Financial analysts warn that the continued accumulation of unpaid bills is eroding confidence in government procurement systems and threatening service delivery at the county level.
The report concludes that without strict adherence to debt repayment prioritisation and stronger enforcement of public finance regulations, county pending bills are likely to continue rising, further straining devolved governance structures and weakening economic stability at the local level.
