COB :Counties splurge on salaries neglect development » Capital News
NAIROBI, Kenya, Sep 13 – Development has continued to face setbacks in devolved units as more than half of the counties focus their budgets on personal emoluments, primarily salaries and wages, with Nairobi county leading in the list.
Overall, County Governments spent Sh208.84 billion on personnel emoluments, which accounted for 47 percent of the total expenditure of Sh446.76 billion and 42.6 per cent of the realized revenue of Sh492.47 billion in financial year 2023/24.
Nairobi County led by Johnson Sakaja was leading in the list where the personal emolument increased from Sh 195.09 Billion in the last financial year of 2022/2023.
In Nairobi County, the expenditure on employee compensation was Sh18.27 billion which represented an increase from Sh12.19 billion reported in a similar period in FY 2022/23.
“The wage bill included Kshs.6.97 billion paid to health sector employees, translating to 38.1 per cent of the total wage bill. The 49.9 per cent increment in employee compensation is attributed to pension arrears payment of Kshs.1.69 billion,” the report read.
The report also shows that delayed disbursement by the exchequer has forced counties to focus their expenditure on wages and benefits as compared to development with Kisii County trailing in the absorption of funds for development.
An analysis done by the Controller of Budget Margaret Nyakang’o indicated a decline of the development budget absorption rate from 61 percent to 57.5 percent.
Out of the Sh 451.21 billion released to counties in the last twelve months, only Sh111.82 billion was spent on development translating to 57.5 per cent.
County governments that had the lowest absorption rates of their respective approved development budgets included Nyandarua (45.9 per cent), Garissa (44.8 per cent) Mombasa at (43.4 per cent),Nairobi City (38.7 per cent) Kisumu (37.0 per cent) and Kisii ( 29.2 per cent).
“The Controller of Budget identified several challenges that hindered effective budget execution, including the National Treasury’s failure to disburse the June 2024 equitable share of revenue to county governments, “Nyakang’o noted.
Narok County was listed as having spent the highest percentage in development expenditure with spending of 90.3 percent amounting to Sh….
Homa Bay (86.3 percent), Wajir (83.4 percent), Mandera (82.6 percent), Meru (79.3 percent), and Bomet (76.2 percent) among the list of counties with the highest absorption rates of their respective approved development budgets.
This comes even as more than half of devolved units prioritized their budget expenditure on wages and benefits with only three counties spending within the 35 percent ceiling provided in the law.
The report released by the Controller of Budget showed only Kilifi, Tana River and Narok counties spent within the financial legal framework.
“The CoB recommends that County Governments ensure that expenditure on personnel emoluments is contained at sustainable levels and in compliance with Regulation 25 (1) (b) of the Public Finance Management (County Governments) Regulations, 2015,”the report read.
Regulation 25 (1) (b) of the Public Finance Management (County Governments) Regulations, 2015, limits the county government’s expenditure on wages and benefits to 35 per cent of the county’s total revenue.
The overall recurrent expenditure during the period under review amounted to Kshs.337.53 billion, accounting for 90.5 per cent of the County government’s budget for recurrent activities.
Although this was a decline from 93.3 per cent recorded in the FY 2022/23 when expenditure was Kshs.330.92 billion majority of the counties have still prioritized their budgets on high expenditures on personnel emoluments.
The Controller of Budget has questioned the expenditure of Sh 15.89 Billion by county governments outside the payroll system in the financial year 2023/2024.
“Further, county governments should fast-track the acquisition of Unifed Personnel Numbers for their staf and ensure payroll is processed through the prescribed government system,”the report read.
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