County governments in Kenya are under fire after a report by the Controller of Budget (CoB) revealed that Sh7.06 billion in salaries, or 7 per cent of the total wage bill, was processed outside the official Integrated Payroll and Personnel Database (IPPD) system in the six months to December 2023.
This raises concerns about potential financial irregularities, with Margaret Nyakang'o, the CoB, highlighting the vulnerability of manual payroll systems.
"The manual payroll is prone to abuse and may lead to the loss of public funds where there is a lack of proper controls," Nyakang'o stated.
The issue of ghost workers continues to plague county finances. Past audits have unearthed evidence of misappropriated funds exceeding Sh35 billion paid monthly to fictitious employees.
Even a 2014 biometric audit, which eliminated over 12,000 ghost workers, seems to have offered only a temporary solution.
Read More
The misuse of manual payroll systems further exacerbates the problem of counties exceeding their allocated budgets for employee compensation.
Public Finance Management (County Governments) Regulations stipulate that counties cannot spend more than 35 per cent of their revenue on wages and benefits.
However, in the first half of the current fiscal year, devolved units spent a staggering 58.2 per cent of their total expenditure, Sh98.13 billion, on personnel emoluments.
This marks a concerning increase from the Sh94.78 billion spent in the same period of the previous year.
The CoB's report serves as a stark warning. It emphasizes the need for county governments to adhere to proper financial management practices, strengthen internal controls, and fully utilize the IPPD system.
Only through such measures can Kenyans be assured that their tax dollars are being used responsibly and not lining the pockets of those who exploit loopholes in the system.
