Salary delays will no longer be a headache for employees once the County Treasury secures short-term loans from commercial banks.
MCAs have approved a proposal that allows the Treasury to borrow from local financial institutions.
According to the ward reps, borrowing is anchored in the Constitution, while the Public Finance Management Act of 2012 gives guidelines on the approval process, the time required for repayment and the limit.
Finance and Economic Planning committee chairman Zachary Njeru said the decision to borrow has been necessitated by the unprecedented late disbursement of funds from the National Treasury.
Njeru added that the late disbursement had curtailed the devolved unit from meeting its financial obligations.
“Short-term borrowing has been working in other counties. Nyandarua becomes the twelfth county to consider it. This will provide a solution to the inconvenience of delayed salaries to employees and payment of service providers,” Njeru added.
While seconding the motion, Nominated MCA Cathryn Nyawira said delay of funds had affected statutory deductions and payments, including NHIF payment which she termed critical.
“When county workers have not been paid their salaries for three months, it translates to their NHIF accounts being in arrears. This means that even their families will suffer as their health cover is affected,” said Nyawira.
Githabai MCA Rimui Kaiyani urged the county treasury to adhere to the conditions required in law on county borrowing.
“This is a great initiative but we are only approving borrowing for the monies needed for gross salaries. Not a single coin above that,” said Kaiyani. House Minority Leader Mwangi Gichuki said the short-term borrowing was an effective measure by the county government to ensure staff earn their salaries in good time.
The county wage bill stands at Sh2.1 billion, according to the 2022/2023 budget. The annual budget stands at Sh7 billion.