Businesses suffer after NYS fails to pay bills

The Nation established that pending bills, some dating back to 2014, have not been settled despite numerous requests by the businessmen and women involved.

The National Youth Service has not paid millions of shillings to genuine suppliers, even as it struggles to emerge from the scandal in which more than Sh1.6 billion was looted in dubious payments.

NYS Director General Richard Ndubai admitted that there are unpaid bills occasioned by the investigation into fraudulent dealings, but said there are less than Sh1 billion.

But according to claimants who spoke to the Nation, the NYS debt to suppliers and other service providers stands at Sh8 billion.

Mr Ndubai added that some cases of unpaid bills were referred to the Treasury because business owners did not have proper documentation to prove they are worth of payment.

Claimants painted a sad picture of businesses that have collapsed because of overdue payments.

In one case, a businessman, who requested anonymity claimed a supplier had died of complications occasioned by a stroke and high blood pressure, a condition he suffered after his business collapsed due to lack of funds.

Others are servicing huge bank loans they obtained on the strength of local purchase orders that were issued by NYS, but have remained unpaid since 2015.

An internal memo dated January 30, 2017 from the officer in-charge of the mechanical and transport branch, E.W. Kundu, to the head of supply management at the NYS shows that Sh697 million is owed to businesses that supplied services and materials to the Mechanical and Transport branch alone. “Attached herewith please find 315 No. payment vouchers for the financial year 2015-2016 and 2014-2015 that were not paid. They are now complete for further action,” the memo reads.


The memo does not include claims from other branches that include Engineering, Gigil Training College, Vocational Training Institute, Institute of Business Studies, Craft, National Holding Unit and the headquarters, among others.

Mr Ndubai said: “One thing I can assure you it is not Sh1 billion. Right now as we are talking it should be less than Sh1 billion. It is not just the pending bills because they have not been paid, but because some of them may not have all the requisite supporting documents. Payments have been going on.”

He also said the investigation triggered a “verification process” to establish genuine claims.

“There was verification of vouchers and LPOs. The verification was about determining what was payable and what was not payable. Some were payable because they had full documentation. We have focused on them and paid them,” said Mr Ndubai.

He also said: “Others were determined not to be payable and we are giving them to the committee in Treasury. It determines what to do when there is insufficient documentation.”

More letters seen by the Nation showed the matter was brought to the attention of State House.

Most of the payments affected involve the slum upgrading project that was spearheaded by then Devolution Cabinet Secretary Anne Waiguru.

She quit office at the height of the scandal which is being investigated by Ethics and Anti-Corruption Commission as well as Parliament.

The most affected are small businesses that have been providing services to NYS for years.


Also affected are businesses that were awarded tenders because their directors were either women, youth or disabled.

Some provided building material, others supplied T-shirts, gumboots, brooms and spades to youths involved in slum projects, some which were launched by President Uhuru Kenyatta.

NYS also carried out an internal audit at the height of the scandal in 2015 that established that pending claims stood at Sh8 billion. It was carried out by a “pending bills committee” which recommended that departmental committees should meet “and produce minutes respective payment vouchers to enable processing of payments.”

Mr Ndubai referred further queries to Public Service Principal Secretary.

“The person who may be able to give you the full dossier is the PS for Public Service. For me I have been here for about a year now. By history I can’t tell you I have institutional memory,” he said.

MPs in their report criticised Ms Waiguru, accusing her of “overall leadership failures” and ignoring the Constitution “in its entirety” regarding integrity.

While unpaid bills continue to weigh down small businesses, companies associated with at least 10 MPs reaped millions of shillings in tenders from NYS.

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