Act now to seal leakages in public service payroll

The ballooning public wage bill makes it a priority for the Government to identify human resource solutions and internal controls to curb the trend.

Over the last six years, there has been an upward growth trend, with the annual growth rate in the wage bill averaged over the last 3 years reportedly approximated to be 20.9 per cent (for 2012/13 alone, the increase was 34.3 per cent), well above the nominal GDP growth (approximated at 14 per cent) and the population growth rate estimated at 3 per cent.

Budget allocation

The county governments that came into being after the March 2013 General Election have also been experiencing a growing wage bill, with some counties spending over 50 per cent of their budget allocation on salaries.

Leakages placing a strain on the wage bill creep in where there are no formal human resource systems and internal controls to keep them in check. The counties have continued to recruit additional staff, leading to the existence of different categories of ‘ghost workers’. There is the ‘ghost worker’ who is on the payroll but does not physically exist; the one who exists physically but reports to work only once in a while; the one who is paid salaries from other cost centres other than the county payroll and the one who does not have any appointment letter but has found his/her way onto the county payroll.

The lack of HR systems and records has also led to retention of staff who are past retirement age or have exhausted their medical leave.

More problematic

For the country governments, the pressing need to employ from all constituencies makes the situation even more problematic. These ghost workers may be costing the national and county governments over Sh1.8 billion annually.

Double-faced employees, a blight on the public sector in many parts of the world, may also be a contributing factor in Kenya’s increased Government wage bill. Double-faced employees are those workers holding two full-time positions in two different organisations, effectively earning two full-time salaries, double-dipping into the Government’s salary coffers.

This malpractice of dual employment is becoming increasingly prevalent in county government systems and is bred and sustained by weak human resource management systems.

Weaknesses in the county internal HR controls such as lack of due diligence, recruitment exercises that are uncoordinated among counties and other agencies, poor supervision and performance management mechanisms taken together depict the system gaps that double-faced workers are using to create an ecosystem to support and breed this malpractice.  

As the dialogue on the ballooning national wage bill gathers momentum, county governments have a broad range of measures they can take under consideration to quell the burgeoning wage bill.  Remedial actions that can be taken include broadening the forensic human resource audit to unearth other leakages in the HR systems both at national and county level.

Other steps that can close the gaps include institutionalising basic HR practices such as perennial HR audits and payroll cleansing, implementing a simple timesheet management system linked to payroll to enhance accountability, and linking the Government Human Resource Information System (GHRIS) to the Integrated Personnel and Payroll Database (IPPD).

To mitigate the leakages and create value for taxpayers’ money, it would be particularly important to enforce a mandatory policy on due diligence during staff recruitment exercises, especially the need to compare public service staff databases with other international agencies implementing programmes in various ministries.

Central database

Counties should also consider having a centrally managed database or alternatively customise the existing human resource information system to suit their workforce to facilitate due diligence exercises, not only to eliminate ghost and double-faced workers but also for professional authentication of existing and prospective employees.  For example, before counties finalise their offer to new hires, the list of potential hires could be shared with human resources officers at the relevant counties and National Government to verify that none of these new hires are already existing employees under any other contract.

It is commendable that some counties have already engaged consultants to undertake human resource audits, workload analysis and institutional development. Significant savings will be realised if the findings are implemented.  The National Government is also planning a major audit following a directive from the President.

Professional councils or bodies also have a role to play in ensuring that their members comply with professional ethics. Recovery of erroneous payments from the perpetrators and commensurate disciplinary measures such as suspension or expulsion from practice are measures that can be considered to avert the malpractice.

The time for action is now.  A ballooning wage bill cannot be sustained.  By taking remedial action to close the gaps identified in human resource management within the public service workforce, the Government will be able to stem the tide of leakages and make significant savings.

The risk the Government face in not taking action is that leakages and malpractices will become more prevalent. Neither the National/County governments nor the taxpayers in Kenya can afford to let this happen.

Caroline is a Human Capital principal consultant while James is a project manager-consulting at Deloitte East Africa. These views are not necessarily those of the firm.