City Hall. A PwC audit has uncovered 4,200 ghost workers out of a workforce of about 12,000. Photo/FILE
The payroll crisis at City Hall could be deeper than initially thought after it emerged that more than a third of its 12,000 workers are either dead, inexistent or serving on forged papers.
In the first hint of the findings of a PricewaterhouseCoopers staff audit carried out in February, Town Clerk Philip Kisia said on Thursday there were 4.215 illegal workers who would be cut off from the payroll.
The move would save the council some Sh2.5 billion annually, bringing it closure to financial independence.
The council has a revenue base of Sh10.2 billion but salaries take up Sh7.2 billion, making wage bill trimming a key plank of any efforts aimed at enhancing service delivery.
The council had a budget of Sh9.9 billion for the current financial year and owed creditors Sh31 billion, pointing to insolvency.
With salaries taking up 73 per cent of the budget, City Hall has been unable to fund expansion or upgrade physical and social amenities like water, schools, health centres, sewerage works and garbage collection at the rate demanded by the rapid population growth.
Mr Kisia said about 3,000 employees were found not to have enrolled for the council-sponsored medical cover, suggesting they were ghost workers.
The failure to use the cover – which is a treasured fringe benefit in work places – was seen as a clear indication that something was amiss with the past employment practices at the organisation.
It was also noted that a further 500 employees could not produce identification papers during the audit.
Another 15 who had died but were still drawing salaries would be removed from the payroll immediately, Mr Kisia said.
Some of the employees were suspected to hold fake appointment letters, while others had forged university degrees certificates and had been ordered to produce originals documents in 14 days.
The Kenya Local Government Workers Union declined to comment until it had perused the PwC report but it defended the 3,026 workers who were not members of the council’s medical scheme.
“They are genuine workers who hold alternative covers. They therefore cannot be insured twice for the same risk under the law,” said Festus Ngari, the union’s Nairobi Staff branch secretary.
According to the Union’s intelligence, Mr Ngari said, 15 workers did not present themselves for the audit, while another 182 could not be found on the two lists separately provided by the council’s human resource and payrolls departments.
For years, there has been suspicion that there were ghost workers on the payroll, preventing the council from achieving the goals of developing the city.
Local authorities have largely been centres of financial haemorrhage in the country with many of them running deficits and even seeking to borrow money they can ill-afford
The suspicion of illegal workers at City Hall led to the appointment of PwC early this year to investigate and report on the matter.
PwC was supposed not only to audit the staff numbers but also to develop a new structure for the organisation.
The final outcome would prepare the stage for a major purge of City Hall’s ghost workers.
The organisation began by asking its employees to report to the constituency offices from February 22 for vetting by PwC.
The workers were to show up ready to confirm their contractual relationship with City Hall including identification documents, letters of employment, academic and professional certificates, latest pay slips, birth certificates, NSSF and NHIF cards and two passport-sized photos.
The town clerk had said then that he expected PwC to help in identifying ghost workers and recommend top talent such as engineers, planners and financial experts, who would fit in a lean but efficient organisation structure that City Hall wanted.
Past review
The council could not employ the critical staff it needed due to the fact that it lacked the necessary funds.
A past review of the council’s human resources revealed that the it lacks critical professional staff including engineers, planners, architects and financial experts.
This had hampered its capacity to deliver services.
The audit is part of the forensic investigations financed by World Bank and they could take up to a year.
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