Economy
Counties pay Sh7bn to staff outside payroll, CoB reveals
Monday March 04 2024
The Controller of Budget Dr Margaret Nyakangó at a past event. FILE PHOTO | DENNIS ONSONGO | NMG
The Controller of Budget (CoB) has questioned the expenditure of Sh7.06 billion by county governments outside of the government payroll system in the six months to December 2023.
In her report on the implementation of the 2023/24 budget by the 47 counties in the half-year, CoB Margaret Nyakang’o warned that the use of the manual payroll is a loophole for theft of public funds.
Dr Nyakang’o added that this contradicts the government policy that requires salaries to be processed through the Integrated Payroll and Personnel Database (IPPD) system.
Read: Budget controller flags Sh5.7bn salaries paid outside payroll
“Analysis of the wage bills shows that Sh7.06 billion of the payrolls was processed manually and outside the government payroll system which accounts for 7 percent of the total wage bills,” she said.
“The manual payroll is prone to abuse and may lead to the loss of public funds where there is a lack of proper controls.”
Counties have been exploiting the use of manual payroll systems to steal from county coffers under the guise of pay for thousands of ghost workers.
Several audit reports in the past reveal that rogue county officials have stolen more than Sh35 billion paid monthly to thousands of fake workers. This is despite a 2014 biometric audit that weeded out over 12,000 ghost workers.
This comes at a time counties have been spending a larger share of their budget on wages and benefits in breach of the law.
The Public Finance Management (County Governments) Regulations, 2015 instruct counties to spend no more than 35 percent of their revenue on wages and benefits.
In the six months to December, the devolved units spent Sh98.13 billion on personnel emoluments, which is 58.2 percent of their total expenditure of Sh168.52 billion during the period.
Read: Sh 1.1trn wage bill chokes development spending
This expenditure increased from Sh94.78 billion incurred in a similar period in the 2022/23 fiscal year.
