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By Jeff Kizzilah, Digital EditorΒ
The Public Accounts Committee has raised alarm over the loss of billions of shillings in taxpayersβ money due to interest charges arising from delayed payments in major government projects.
The matter arose during a session in which the Committee, chaired by Hon. Tindi Mwale (Butere) , examined the 2023/2024 report of the Office of the Auditor-General on the accounts of the State Department of Irrigation.
Principal Secretary Ephantus Kimotho, accompanied by senior officers, appeared before the Committee to respond to audit queries.
The Auditor-Generalβs report for the financial year ended June 30, 2024, indicates that KSh42.12 million was paid to a firm contracted for the construction of the Thiba Dam as accumulated interest due to penalties on delayed payments.
“The costs were avoidable and were attributed to delay in honoring payments when due by the Project. In the circumstances, value for money amounting to Kshs.43,122,375 could not be confirmed,” reads the report in part.
PS Kimotho concurred with the Auditorβs observations, noting that the delayed payment was caused by underfunding of the projectβs budgetary provisions.
His admission drew sharp reactions from Committee members, who expressed concern over continued losses of public funds through penalties.
“The amount of money that this country has to pay for penalties is even more than the principal amount of some specific project. If a calculation of how much interest and penalties have been paid in this country, I’m very sure maybe it will hit a trillion Shillings,” observed Hon. Edwin Mugo (Mathioya).
Hon. Mwale agreed that delayed payments by the National Treasury affect multiple state departments and called for urgent measures to curb avoidable interest expenses.
“This is an issue that needs to be looked at critically. As a watchdog Committee we are ready to engage Treasury to address the issue and prevent further losses of public funds” said Hon. Mwale.
