• Governor says an internal verification exercise 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.

Nairobi Governor Johnson Sakaja has explained how the county reduced its outstanding pending bills from Sh118.79 billion as at July 1, 2024, to Sh75.07 billion by June 30, 2025, following questions from the Senate County Public Accounts Committee on how the Sh43.73 billion reduction was achieved.

Appearing before the committee on Monday, Sakaja said addressing the inherited debt required the establishment of a verification committee to scrutinise the entire outstanding amount and establish the validity of the claims.

The Governor explained that the reduction 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.

“KSh118 billion in pending bills is a substantial amount of money. Having inherited this debt from my predecessors, I constituted a committee to undertake an internal verification of the entire amount. The exercise 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,” Sakaja said.

He reiterated that the county had provided a detailed schedule accounting for the KSh43.73 billion reduction through adjustments and reconciliations.

Of this amount, KSh1.63 billion related to legal assessments, while KSh19.14 billion represented government-guaranteed loans whose servicing had been suspended due to a lack of supporting documentation and loan schedules, Sakaja explained.

A further KSh19.2 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.

The county also reiterated that it 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.

Beyond the verification of pending bills, Sakaja said the administration had also strengthened the County’s legal department to reduce expenditure on external legal services and protect public resources.

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.

The committee, chaired by Senator Moses 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 reduction.

The committee also sought further clarification on the verification exercise and the adjustments made to the outstanding debt.