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45 counties defy law that limits expenditure on workers' wages

Controller of Budget Margaret Nyakang’o. [Elvis Ogina, Standard]

Controller of Budget Margaret Nyakang’o has raised concern over the huge wage bills that counties are struggling with.

A report covering the first nine months of the 2023/2024 Financial Year indicates that only Narok and Kilifi counties managed to cap expenditure on wages below 35 per cent of the total expenditure.

Nyakang’o, in the County Governments Budget Implementation Review Report for the first nine months of the financial year, noted that counties continue to spend more on personnel emoluments than what the law stipulates.

Regulation 25 (1) (b) of the Public Finance Management (County Governments) Regulations, 2015 sets a limit of the county government’s expenditure on wages and benefits at 35 per cent of the county’s total revenue.

Nyakang’o said overall, county governments spent Sh146.53 billion on personnel emoluments, which accounted for 53.5 per cent of the total expenditure of Sh274.08 billion.

“Only two county governments, namely; Narok and Kilifi had expenditure on personnel emoluments below 35 per cent of total expenditure in the period under review,” stated Nyakang’o.

In Kilifi, the expenditure on employee compensation was Sh2.98 billion, or 26.4 per cent of the available revenue, which amounted to Sh10.63 billion.

The expenditure represented a decrease of 15.6 per cent from Sh3.53 billion reported in a similar period in FY 2022/23.

In Narok, the expenditure on employee compensation was Sh2.59 billion, or 27.3 per cent of the available revenue, which amounted to Sh9.49 billion. The expenditure represented a decrease from Sh3.02 billion reported in a similar period in FY 2022/23.

Narok County Executive Committee Member for Public Service Management & Labour Josephine Ngeno attributed the success to a human resource audit that enabled them to weed out ghost workers.

“We had ghost workers and we managed to weed out people who had no papers,” she said.

Baringo County Government is among the counties that recorded the highest expenditure on employee compensation. The county’s wage bill was Sh2.69 billion, or 45.4 per cent of the available revenue, which amounted to Sh5.93 billion. The expenditure represented an increase from Sh2.5 billion reported in the first nine months of FY 2022/23.

Elgeyo Marakwet’s wage bill accounted for 45.3 per cent of the revenue in the first nine months of 2023/24 of Sh2.12 billion.

Garissa County spent Sh2.70 billion, on employee compensation (47.1 per cent), amounting to Sh5.73 billion.

The CoB recommended that expenditure on wages should be contained at sustainable levels and in compliance with the law.

The audit also revealed county governments are yet to shift from using manual payroll systems despite directive by the Head of Public Service.

County Governments were required to migrate to the Unified Human Resource Information System by October 1, 2022.

Counties were required to adopt the use of the Integrated Personnel and Payroll Database to ensure efficient processing of wage bills.

“The manual payroll is prone to abuse and may lead to the loss of public funds,” read the audit. Reports indicate continued use of manual systems to pay salaries.

The Office of the Controller of Budgets has been reminding counties to fast-track the acquisition of Unified Personnel Numbers for staff, advice which seems to have fallen on deaf ears.

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