Counties flout payroll process by paying Sh15 billion wages manually

Controller of Budget Margaret Nyakang'o when she appeared before Mediation Committee on the County Governments Grants Bill at Parliament, Nairobi on March 22, 2022. [David Njaaga,Standard]

County Governments are yet to adopt the use of the Integrated Personnel and Payroll Database to ensure efficient processing of wage bills.

Instead, most counties are still processing employees' payroll through the manual system, hence contravening the government policy that requires salaries to be processed through the IPPD system.

Controller of Budget Dr Margaret Nyakang'o in County Governments Annual Budget Review Report for Financial Year 2021/2022 had revealed that counties processed wages amounting to Sh15.63 billion through the manual systems and vouchers.

Nyakang'o then advised counties to fast-track the acquisition of staff personal numbers to ensure the entire wage bill is processed through the prescribed system.

The Controller of Budgets notes that the use of a manual system is prone to abuse and may lead to the loss of public funds due to a lack of proper controls.

According to the September 2022 report, counties cite the lack of Personal Identification Numbers of staff for failure to process all salaries in the IPPD systems. Counties were required to migrate to the Unified Human Resource Information System by October 1, 2022, in line with the guidelines by the Head of Public Service.

County Governments Budget Implementation Review Report for the First Quarter of the Financial Year 2022/ 2023 has revealed that counties are yet to align to the requirement.

Millions, the review report reveals, have been paid by counties through the manual systems.

The audit revealed that the continuous use of the manual payroll was a result of delays in the allocation of Unified Payroll Numbers (UPN) to staff, recruitment on designations that do not conform to the scheme of service and the IPPD system, and employment of staff on short term contracts of less than six months. Baringo, Bomet, Busia Embu, Garissa, Homa Bay, Kajiado, Kakamega, and Kericho are among the counties processing wages through manual systems.

Baringo County as per the review report paid Sh18.46 million through manual payroll. The manual payroll amounted to 2.3 per cent of the total Personal Emoluments costs.

"Personnel emoluments amounting to Sh791.60 million were processed through the IPPD system, while those paid through manual payroll were Sh18.46 million," read the review report in part.

The audit revealed that the use of the manual payroll was caused by delays in the allocation of Unified Payroll Numbers (UPN) to staff.

"There were recruitments on designations that do not conform to the scheme of service and the IPPD system and employment of staff on short-term contracts of less than six months," read the audit.

Bomet County in the first quarter of the financial year processed Sh317.36 million through manual payroll.

"The manual payroll accounted for 38.8 per cent of the total personal emoluments costs and is due to delays in the allocation of Unified Payroll Numbers (UPN) to staff, recruitment on designations that do not conform to the scheme of service and the IPPD system, and employment of staff on short term contracts of less than six months," read the audit.

Personnel emoluments amounting to Sh501 million were, however, processed through the IPPD system.

Busia County paid Sh4.96 million through the manual system, while Embu paid Sh7.33 million.

The first quarter audit revealed county governments spent Sh54.82 billion. Recurrent expenditure was Sh52.60 billion, while development expenditure amounted to Sh2.22 billion.