For every Sh100 spent by county governments, Sh40 is used to pay salaries

The controller of Budget Mrs. Agnes Odhiambo
For every Sh100 spent by county governments last year, at least Sh40 was used to pay staff salaries.

An in-depth data analysis of the county spending data by Sunday Standard paints a picture of an impending wage bill crisis that has seen 34 counties shoot through the salaries spending ceiling in the last financial year.

This left majority of the devolved units with little to spend on operations and maintenance in what saw development projects dropped or forced contractors to go without pay. The Controller of Budget (COB) has over the past five years been sounding an alarm over the rising wage bill at both the national and county levels of government, but her advice seems to have been ignored.

Instead, the wage bill crisis seems to be worsening over the years. It swelled by 10 per cent to hit Sh130 billion in the 2016/17 financial year, in a trend that if remains unchecked will push the devolved units over the cliff.

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In her latest report, COB Agnes Odhiambo has called out 35 counties whose expenditure on personnel emoluments were way above the red line, and are racing towards unsustainable.

“The office notes that the high wage bill is unsustainable and will negatively affect spending on development activities,” Ms Odhiambo says in her latest report.

She cautions counties to ensure expenditure on personnel emoluments is contained within sustainable levels in compliance with the Public Finance Management Regulations.

The recommended ceiling for personnel emoluments is 35 per cent, but only a dozen counties were in the clear. The rest were way above this threshold, with others spending more than half of all their money on salaries.

Top on the list of counties who are spending the most share of their expenditure on salaries is Tharaka Nithi, which pumped 60 per cent of all its money to its employee’s bank accounts as salaries.

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To break it down, of every Sh1,000 that left the accounts of the county under the administration of former Governor Samuel Ragwa, Sh600 was used to pay salaries. In total, out of the Sh2.7 billion total expenditure, Sh1.6 billion was paid to staff.

This left it with just Sh1.1 billion or 40 per cent of its total expenditure to take care of its other bills that include repairs and maintenance as well as fund development expenditure.

The second worst spending county was Taita Taveta under the administration of former Governor John Mruttu, which spent 59 per cent of its funds on staff salaries.

It was followed by Nairobi City County under Dr Evans Kidero, whose share of salary expenditure stood at 54 per cent. Nairobi County remains the biggest spender on salaries in total, with a wage bill of Sh13.4 billion last year alone in absolute terms. However, the county comes third if this expenditure is measured as a percentage of its total revenues.

Other counties which spend at least half of their resources just paying staff include Kisii (52 per cent), Elgeyo Marakwet (52 per cent), Nyeri (51 per cent), Kirinyaga (51 per cent), Homa Bay (50 per cent) and Kisumu (50 per cent).

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Ironically, the far flung counties in the arid and semi-arid parts of the country emerged the most prudent spenders on their wage bill. This is partly due to the fact that they inherited smaller staff numbers than their more established counterparts during the advent of devolution.

This saw Turkana, Marsabit, and Mandera spend the least proportions of their expenditures on paying salaries at 24 per cent, 23 per cent and 16 per cent respectively.

Other counties in the safe territory include Samburu (27 per cent), Kilifi (28 per cent) and Makueni (30 per cent). Kitui and Kwale each are at 34 per cent, while West Pokot, Kajiado, Tana River and Nandi counties are tinkering on the 35 per cent boundary.

Last year, all the 47 county governments spent a total of Sh130.9 billion on personnel emoluments. This accounted for 41 per cent of the total expenditure for the period, and an increase of 10.4 per cent from Sh118.65 billion incurred in the previous year.  The wage bill crisis is exacerbated by continued hiring of county executives and a near free hand in other benefits enjoyed by elected officials in the county.

Ward representatives, also known as the members of county assemblies (MCAs), have perfected the art of blackmailing county governments to get away with extra benefits and mileage allowances, leaving the taxpayer to shoulder a bigger burden.

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Despite the hefty wage bills, some counties spent more money on trips than what was actually budgeted for, squeezing the little resources that would have otherwise been used to fund development projects.


A similar analysis of expenditure on domestic and foreign travel as a proportion of budgetary allocation shows that at least six counties spent more than the approved annual allocation.

“This indicates weak budgetary control, which should be enhanced to ensure expenditure is within the approved budget,” Ms Odhiambo noted.

These counties include Nakuru, Trans Nzoia, West Pokot, Migori, Baringo and Kisii having overspent their travel budgets by 296.1 per cent, 245.2 per cent, 119.6 per cent, 107.2 per cent, 106.2 per cent and 102.6 per cent respectively.

The situation gets complicated in counties whose locally generated funds are far below their targets. This has seen most close the year with mountains of pending bills that have left contractors fighting auctioneers over bank loans.

At the close of the last financial year on June 30, the devolved units of government had accumulated debts of Sh35 billion in pending bills.

The Controller of Budget notes that the pending bills consisted of Sh11.56 billion for recurrent expenditure and Sh24.29 billion for development expenditure.

Mombasa, Turkana, and Nakuru closed the year with the biggest amounts in pending bills, booking Sh3.95 billion, Sh2.9 billion and Sh2.8 billion. Kitui was the only county that reported nill pending bills as at June 30, 2017.

“Machakos, Mandera, and Nairobi had not submitted the status of pending bills at the time of finalising this report,” Ms Odhiambo says. This means that the list could change factoring in this.

Pending bills constitute one of the biggest challenges for transition county governments given that new administrations are hit by some bills that may jeopardize their spending plans.

“Accumulation of huge pending bills erodes investor confidence, negatively affects the business community and could result in litigation by creditors,” Ms Odhiambo notes.

The Controller of Budget has asked the counties to ensure effective management of pending bills by aligning procurement plans to cash flow projections and ensuring that all pending bills are budgeted for and paid promptly in the following financial year.

The new county bosses are now preparing their first budgets, and it is only a matter of time before it becomes clear how the new regimes will deal with the wage bill issue, which is both a political and economic issue.

The main arguments for devolution was that the national government in Nairobi had lost touch with the rest of the country, especially in the furthest points of Kenya. County governments were therefore tasked with the responsibility of ensuring that national resources benefitted as many people as possible in the grassroots.

One way of doing this was to ensure that as much money as possible is channeled towards development expenditure, and this required that counties put as little money as possible in administration to release the rest of the funds to do service delivery.

But just running county governments have become expensive, taking away significant proportions of money in administration and paper work, which could otherwise have been used to better the lives of Kenyans.

The data analysis showed that governor’s offices of Laikipia, Nairobi and Lamu counties were the most expensive to run last year, having spent the biggest proportions of their total expenditures on the offices of their governors.

The breakdown for recurrent expenditure — money used to pay for salaries in the governor’s office, buy tea, entertain guests and carry out county administration among others — shows that Laikipia County spent Sh2.2 billion, which represents 48 per cent of the total expenditure on county administration.

This made Laikipia County, under the leadership of its former Governor Joshua Irungu, the top most spender in terms of the share of recurrent expenditure as a fraction of its total expenditure in 2016/17.

The office of the governor of Nairobi, under Dr Kidero, came second after it spent Sh5 billion, which represents 20 per cent of its total expenditure last year on its recurrent expenditure.

The two were followed by Homa Bay County (11 per cent), Trans Nzoia (11 per cent) and Kisumu County (10 per cent). Other top spending offices of governors include Tana River (10 per cent), Samburu (9 per cent), Kirinyaga (8 per cent) and Bomet (7 per cent), completing the list of the top 10 most expensive county governors’ offices.

Despite being left with less than a third of their resources to pump into development expenditure, counties also did not absorb the entire amounts.

The report notes that county governments spent Sh103.34 billion on development activities, representing an absorption rate of 65.3 per cent of the annual development budget.

This is however a slight increase from 65.2 per cent, reported in the previous year when development expenditure was Sh103.45 billion.


Turkana County channeled the highest amounts on development activities in absolute terms at Sh.6.16 billion, followed by Mandera County and Kakamega County at Sh5.83 billion and Sh5.21 billion respectively.

Counties that reported the lowest development expenditure included Tharaka Nithi, Lamu and Taita Taveta at Sh546.72 million, Sh467.34 million and Sh405.65 million respectively.

But a more detailed analysis of development expenditure as a proportion of approved annual development budget shows that Machakos, Wajir, Bomet, and Isiolo Counties attained the highest absorption rate at 99.1 per cent, 90.1 per cent, 89.3 per cent and 88.6 per cent respectively.

Lamu, Nakuru County, Nairobi City County and Taita Taveta County reported the lowest absorption rate of their development budget at 38.3 per cent, 35.1 per cent, 33.4 per cent and 28.6 per cent respectively.

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