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Over 40 counties breaching salary expenditure caps choking funds meant for development; Report

More than 40 counties breach salary, perks expenditure caps, hitting a record of Sh195.09 billion according to the CoB report.

With the amount spent reaching a record high of Sh195.09 billion, over 40 counties exceeded the limit on expenditures intended to pay salaries and allowances, continuing a trend that has considerably reduced funding intended for development projects since 2013.

According to recent data from the Controller of Budget (CoB), 42 counties violated the constitutional threshold by spending 45.5% of their total revenue on salaries, perks, and allowances.

According to the Public Finance Management Act of 2015, counties are permitted to spend up to 35% of their annual budget for salaries and benefits.

However, expenditure trends show that the share of total revenue that counties spent on development projects hit a record low of 22.8 percent or Sh97.97 billion.

The high spending on benefits and salaries once again forced the counties to go slow on their development projects, derailing one of the key intentions of devolution— spurring development at the grassroots.

“The Controller of Budget notes that personnel expenditure by only five counties was within the 35 percent ceiling, namely; – Turkana, Tana River, Mandera, Kwale, and Samburu,” CoB Margaret Nyakango says in the report.

Counties have been on the spot for increasingly splashing billions of shillings on items that increase the take-homes for senior staff at the county assemblies and executive arms such as trips abroad and seminars.

The number of employees in the counties has also increased as succeeding governments move to reward political allies in an effort to strengthen their support.

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According to official data from the Salaries and Remuneration Commission (SRC), the number of employees at the counties increased by 23.8 percent, from 175,500 to 217,300, in the year ending in June 2022.

Counties spent Sh190.11 billion, or 47.7% of their total revenue, on salaries and benefits in the fiscal year that ended in June 2022, while Sh98.47 billion, or 24.6%, went toward development initiatives.

Counties have since the start of devolution breached the ceiling which is set out in the Public Finance Management (County Governments) Regulations, 2015, continually squeezing funds available for projects such as health and roads.

The CoB has over the years flagged the counties for the continued breach of this requirement on revenue expenditure, saying that it has continued to deny Kenyans the right to improved services from the county governments.

In the year ended June 2023, the amount that counties splashed on personnel emoluments was the highest since the inception of devolution while the cash spent on development projects sunk to the lowest in a similar period.

Besides the CoB, SRC has also flagged the devolved units for the perennial breach of the 35 percent cap on salaries and wages.

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