Sh250 billion frozen as new procurement system hits delays
The delays in uploading budget documents threaten to hold back projects, office supplies, and other essential procurement, potentially affecting operations across counties and State departments.
Counties and national government agencies are facing a severe cash squeeze as delays in transitioning to the new digital public procurement system threaten budget implementation, just a month before the end of the first quarter of the financial year.
Projects remain unfunded, leaving counties and many State departments only able to pay salaries while procurement-related expenses stall.
The National Treasury reported that no county budgets had been uploaded on the electronic procurement (e-GP) system as of yesterday (Friday), while uploads for State departments were in progress.
Following last month’s rollout of the e-GP platform, all county and national government budgets must be uploaded for procurement transactions to be approved.
Treasury CS John Mbadi emphasized that entities can only proceed with procurement after uploading budgets on the Integrated Financial Information Management System (Ifmis), after which the Treasury transfers them to the e-GP portal.
“Budgets for procuring entities using Ifmis as their financial management system must be uploaded in the e-GP system before preparation of the annual procurement plan and subsequent initiation of the procurement process,” Mr Mbadi said.
By yesterday, only 31 counties had successfully uploaded their budgets on Ifmis following approvals by the Controller of Budget (CoB), and only four were ready for transfer to the e-GP.
The delays in uploading budget documents threaten to hold back projects, office supplies, and other essential procurement, potentially affecting operations across counties and State departments.
“So, the tendering process begins after the procurement plans are prepared in the e-GP. There's no way you can start the tendering process without the procurement plan in the e-GP,” Mr Mbadi added.
Treasury estimates that about Sh1 trillion of spending this fiscal year is procurement-based.
With roughly Sh250 billion of first-quarter procurement yet to be tapped, entities face the challenge of absorbing these funds in the remaining weeks to the end of September.
CS Mbadi said the Treasury has begun uploading State departments’ budgets and expects them to be ready by today, while counties will have to wait until Monday.
