Counties spent more than 35 percent of their revenue on salaries and allowances, hurting delivery of services.
The Public Finance Management Regulations, 2015, bar counties from blowing more than 35 per cent of their total revenue on wages.
Treasury secretary Henry Rotich has written to 32 counties with bloated wage bill asking them to furnish him with plans and timelines to comply with legal requirements capping pay expenditure at 35 percent of revenues.
The counties, Mr Rotich says in the draft 2019 Budget Policy Statement, spent more than 35 percent of their revenue on salaries and allowances, hurting delivery of services.
“On average, county governments have struggled to stay within the legal wage spending threshold since FY 2014/15,” he says.
Mr Rotich says the National Treasury will work with the affected counties in reviewing their plans and provide technical assistance.
The Public Finance Management Regulations, 2015, bar counties from blowing more than 35 per cent of their total revenue on wages.
“Considering the growing fiscal risks associated with uncontrolled expenditure on personnel emoluments, the National Treasury has, on the basis of section 46(3)(c) of the PFM Act, 2012 requested all concerned counties to prepare and submit action plans including timelines, for achieving sustainable wage bills.”
Most counties are, however, struggling to generate own revenue. Nairobi, Machakos, Embu, Laikipia and Wajir, for example, blew more than half of their total income on wages last financial year ended June, according
“Improvements in delivery of devolved services can be sustained only if County Governments adhere to existing fiscal rules.
“For this reason, beginning FY 2019/20, the National Treasury will renew its focus on enforcing compliance with the Fiscal Responsibility Principles – particularly legal thresholds for wage bill and development spending…”
Budget controller Agnes Odhiambo says in her latest quarterly report that emoluments in the 47 counties jumped to nearly Sh37.13 billon between July and September 2018 from Sh27.75 billion in a corresponding period the year before.
That happened despite a rising chorus for governors to increase allocations to development projects, where 24 counties did not incur any expenditure on development activities.
Expenditure on the development projects, the Controller of Budget report shows, was Sh3.51 billion – meaning for every Sh100 spent by the countries in the July-September 2018 period, less than Sh7 went to development.
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