Counties widen breach on salary expenditures

The portion of tax revenues spent by counties on employee salaries and allowances has risen, new data shows, widening the breach on the legal cap on such expenditure.

Data from the Controller of Budget shows that the amount splashed on salaries and allowances as a percentage of the total revenue rose to 41.7 percent in the year to last June from 36.5 percent the previous year.

Counties are under the Public Finance Management Act, 2015 allowed to spend up to 35 percent of the total revenues in a fiscal year on salaries and allowances.

They spent Sh171.8 billion on salaries and allowances against Sh411.96 billion total revenue in the period under review, up from Sh162.8 billion the previous year when income stood at Sh445.36 billion-- prompting a red flag by the National Treasury which now says the trend is squeezing out funds for delivery of basic services such as healthcare and construction of roads.

“This is a worrying trend that if not tamed would greatly impact negatively on service delivery as most of the other developmental needs of the counties suffer,” Treasury Secretary Ukur Yatani says in the Budget Policy Statement for the year starting July.

Eleven counties complied with the PFM Act in the 2019/20 year up from five the previous year but the Sh171.8 billion splashed on salaries and allowances was more than Sh104.51 billion that the counties spent on development projects in the period under review.