IEBC offered Sh2.85bn to clear debts

Politics and policy

IEBC chairman Issack Hassan. PHOTO | FILE 

By EDWIN MUTAI

Posted  Monday, December 22  2014 at  20:00

In Summary

• Suppliers will have to wait until Parliament returns from the Christmas recess on February 10, but the Treasury can release the cash and seek MPs’ nod within two months.
• The IEBC says most of the claimants are suppliers who commissioned officials called in to offer services in the heat of the elections, especially where emergencies arose with no time to follow procurement procedures.

Suppliers’ woes at the Independent Electoral and Boundaries Commission (IEBC) could come to an end, after the Treasury offered Sh2.85 billion to clear debts.

Treasury secretary Henry Rotich is seeking parliamentary approval to withdraw the cash for pending bills, largely arising from the March 4, 2013 General Election.

This call was made through a supplementary budget table that seeks to ease IEBC’s cash crunch that has deepened in recent months, with legal suits filed by suppliers affecting the agency’s operations.

IEBC’s position has been made more difficult by the fact that the Treasury is yet to release the Sh1.1 billion that Parliament set aside for settlement of the agency’s debts.

Suppliers will have to wait until Parliament returns from the Christmas recess on February 10, but the Treasury can release the cash and seek MPs’ nod within two months.

Private sector operators said the IEBC’s failure to settle its debts had hit some companies hard, forcing them to seek redress in court.

Office Technologies, which is claiming Sh220 million from the IEBC, tops the list of big suppliers. The company said in court documents that it had borrowed money from a bank to render services to the IEBC and that the debt is now accruing interest at an annual rate of 21.5 per cent.

IEBC’s indebtedness is further complicated by the fact that some of the suppliers have obtained court orders requiring full payment of their debts with accrued interest — meaning any further delay increases the amount it will finally pay.

READ: IEBC in cash crunch as supplier debts hit Sh2.8b

Office Technologies, for instance, got a court order in July directing the IEBC to pay it Sh220 million plus interest backdated to March 2013 until the debt is settled.

Justice Eric Ogola ruled that the firm, having won the tender and delivered 290 printers on February 14, 2013 that were used in the General Election, should be paid its money.

IEBC reckons the exact amount of money that it owes suppliers remains unknown because some of the claims are not supported by valid documents.

The IEBC says most of the claimants are suppliers who commissioned officials called in to offer services in the heat of the elections, especially where emergencies arose with no time to follow procurement procedures.

Auditor-General Edward Ouko has taken issue with the IEBC’s spending of Sh4.69 billion in the 2012/2013 financial year without supporting documents. That is the period within which the March 2013 elections were held.

The 2012/13 Auditor-General’s report indicates that the IEBC spent a total of Sh13.63 billion charged under 11 items whose accuracy could not be ascertained as at June 30, 2013.