Over 40 counties breached the cap on expenditure meant to pay salaries and allowances with the amount spent hitting the record high of Sh195.09 billion, extending a trend that has significantly choked funds meant for development projects since 2013.
The latest data from the Controller of Budget (CoB) shows that 42 counties spent 45.5 percent of their total revenue on salaries, benefits and allowances which was a breach of the constitutional requirement.
Counties are under the Public Finance Management Act, of 2015 allowed to spend up to 35 percent of the total revenues in a fiscal year on salaries and allowances.
An analysis of the expenditure trends shows 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 the 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 per cent ceiling, namely; - Turkana, Tana River, Mandera, Kwale, and Samburu,” CoB Margaret Nyakango says in the report.
The devolved units 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.
Employee numbers in the counties have also been on the rise as subsequent governments move to reward political cronies in a bid to cement their popularity.
Official data from the Salaries and Remuneration Commission (SRC) shows that the staff count at the counties rose 23.8 percent to 217,300 in the year ended June 2022, from 175,500 six years ago.
Counties had in the year to June 2022 spent 47.7 percent (Sh190.11 billion) of their total revenue on salaries and allowances, while Sh98.47 billion (24.6 percent) was spent on development projects.
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.
As a share of total revenue, the lowest that the devolved units have spent to pay salaries, allowances and benefits was highest in the year to June 2015 at 39.9 percent or Sh103.1 billion.
Besides the CoB, SRC has also flagged the devolved units for the perennial breach of the 35 percent cap on salaries and wages.
Besides hurting the ability to fund development projects, high expenditure on salaries and wages has also made it difficult for the counties to pay billions of shillings owed to the private sector.
Pending bills by the devolved jumped Sh11.74 billion to Sh164.76 billion in the year ended June, as the private sector grapples with mounting cash-flow woes that have since forced them to shut down, tap loans or reduce employee count.