Commission on Revenue Allocation chairman Micah Cheserem. PHOTO | FILE
Civil society groups are piling pressure on the Treasury to restrict hiring of new workers by counties already grappling with bloated staff as the Senate begins to review a new proposal for revenue sharing among counties.
The calls follow a new formula that the Commission on Revenue Allocation (CRA) proposed in December that seeks to introduce personnel emolument (PE) as one of the basis for distributing money to counties.
Commission on Revenue Allocation (CRA) chairman Micah Cheserem said PE, pegged at two per cent of the money available to counties, would ensure that counties with high staff numbers get extra to cater for wages. The Constitution guarantees the 47 counties at least 15 per cent of the national budget.
Last week, the civil society groups criticised CRA for handing governors “a blank cheque that could trigger recruitment frenzy” among smaller counties.
“PE should be a conditional grant to counties that excel in trimming their wage bill,” Ms Vivian Magero, an outreach coordinator at the International Budget Partnership (IBP), told a public hearing organised by the Senate Finance Committee last week.
Ms Magero said a number of county governments, especially those within the former provincial headquarters, already spend a large portion of their revenues on personnel costs at the expense of service delivery.
“Aside from having the personnel emolument factor attached with a conditional requirement, the population parameter should be on a need-assessment basis,” she said.
According to the annual report by the Controller of Budget, on average, counties paid 61 per cent of their actual recurrent expenditure during the 2013/14 financial year on PEs.
West Pokot senator John Lonyangapuo said some county governments were employing “an unnecessarily huge workforce that are permanent and pensionable thus increasing their wage bill”.
Makueni senator Mutula Kilonzo Junior said: “We are not certain whether some counties have rationalised their wage bill to justify their need for the personnel emolument allocation.”
Apart from PE, CRA has proposed the use of six other parameters that include population, basic equal share, poverty, land area, fiscal responsibility and development factor to determine revenue allocations.
The commission proposes to retain the weight of population at 45 per cent, 25 per cent for equal share and eight per cent for land area.
The poverty parameter has been cut by two points to 18 per cent while fiscal discipline is now at one per cent, having been cut by half. It is from the reductions that the development factor at one per cent and PE have been carved.
“The personnel emolument factor should be given as a conditional grant to counties that show prudence in their books of accounts,” said committee chairman Billow Kerrow.
He said the committee had already advised the CRA on the formula such that it addresses costs and needs of a given population rather than basing its revenue allocation on a static figure of 45 per cent.
The formula is an attempt to expand the much criticised five parameters – population, equal share, land area, poverty and fiscal responsibility – that have been used over the past two financial years.
The formula on revenue sharing is reviewed every three years and the current one is expected to serve up to the 2017/2018 financial year.
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