Sakaja defends Sh43.7b drop in Nairobi County's pending bills before Senate

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Nairobi Governor Johnson Sakaja has told the Senate that pending bills in the city have been reduced from Sh118.79 billion to Sh75.07 billion through verification and payment.

Sakaja revealed that internal verification established that the Sh43.73 billion reduction was not achieved solely through payments but also involved legal assessments, court-ordered adjustments and the verification of disputed claims.

The governor, who appeared before the Senate County Public Accounts Committee at Parliament Buildings in Nairobi on Monday, said addressing the inherited debt required establishment of a verification committee to scrutinise the entire outstanding amount and establish the validity of the claims.

“The reduction of Nairobi County pending bills by Sh 43.73 billion was not achieved entirely through cash payments but also involved adjustments arising from legal assessments, suspended government-guaranteed loans, court-ordered reductions and disputed claims,” said Sakaja.

He told the Senate Committee chaired by Homa Bay Senator Moses Kajwang that the Sh118 billion in pending bills was inherited from his predecessors and that he had constituted a committee to undertake an internal verification of the entire amount before payments were done.

Sakaja explained that the verification established that the reduction was not solely through payments but also involved adjustments arising from legal assessments, suspended government-guaranteed loans, court decisions and disputed claims.

“I would like to inform Senators that my administration has provided a detailed schedule accounting for the Sh43.73 billion pending bills reduction through adjustments and reconciliations,” he said.

The governor said that of this amount Sh1.63 billion related to legal assessments, while Sh19.14 billion represented government-guaranteed loans whose servicing had been suspended due to a lack of supporting documentation and loan schedules.

Sakaja told Senators that Sh19.2 billion related to LAPFUND interest and penalties which the County said had been reduced following a court consent that brought the claim down to approximately Sh8.2 billion.

He said that they had provided a signed indemnity form, in accordance with County Treasury rules governing misplaced payment documents, alongside a financial memo confirming that the works had been undertaken and payment made.

“The audit further raised concerns over Sh16.04 million in receivables from non-exchange transactions, which lacked sufficient supporting documentation,” said Sakaja.

The governor told senators that beyond the verification of pending bills his administration had also strengthened the county’s legal department to reduce expenditure on external legal services and protect public resources.

Sakaja noted that through the reforms, Nairobi saved approximately Sh8.48 billion in legal costs over two financial years by expanding its in-house legal capacity, handling more litigation internally and negotiating reductions in legal fees claimed by private advocates.

According to the County Assembly’s Justice and Legal Affairs Committee, of the 174 court cases concluded during the period under review, 84 were handled by the County’s in-house legal team, with 47 determined in Nairobi’s favour, representing a 56 per cent success rate.

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Kajwang, commended the County for reducing its pending bills but asked the Governor to provide additional documentation supporting the payments and processes undertaken to account for the Sh43.73 billion reductions.

“The Senate County Public Accounts Committee requires further clarification on the verification exercise and the adjustments made to the outstanding debt,” said Kajwang.