Auditor: Laws abuse behind bloated county wage bills
Auditor General Nancy Gathungu at Inn Paradise, Mombasa,
on September 16, 2022.
Auditor-General Nancy Gathungu has raised alarm over counties abusing employment laws, leading to bloated wage bills.
The Auditor-General’s report to Parliament on county government’s financial statements up to June 2021 has revealed that counties abused the laws to increase their staff counts.
Most of the 26 new governors are currently undertaking audits of their counties’ human resources to weed out ghost workers and clean up payrolls. Some of the counties have attracted the attention of detectives from the Ethics and Anti-Corruption Commission (EACC).
In the period under review, the Kiambu County government hired about 3,000 casual workers illegally in one year during ex-Governor James Nyoro tenure at a cost of Sh300 million, lifting the lid on how counties abuse employment laws leading to bloated wage bills.
“Examination of records provided for audit review revealed that the management hired 2,999, casual employees during the year under review (2020-2021) at a cost of Sh299,079,462. However, the records provided lacked details of the hiring procedure and personal information, including IDs, KRA (Kenya Revenue Authority) PINs and approvals by the advisory committee. In the circumstances, management breached the law,” reads part of the audit report.
The damning revelation would also be of interest to KRA over non-payment of taxes where there were no records of KRA PIN for some of the employees, meaning that they did not pay tax.
Further, auditors established that the county did not involve the County Public Service Board, which has the mandate to hire workers, and that there were no records of what the employees were doing, suggesting that some of them were ghost workers who were earning in the comfort of their homes or other workplaces.
The report covers five months after Mr Nyoro took office following the impeachment of his former boss Ferdinand Waititu.
During the year under review, the county had a wage bill of Sh6.78 billion, translating to 45 per cent of the budget, which is above the 35 per cent limit set in Section 25(1)(b) of the Public Finance Management Act.
The county, according to the audit report had 7,216 workers during the year, and auditors found that only 5,664 were in the Integrated Personnel and Payroll Database (IPPD), while the rest were paid Sh555.4 million manually.
Governor Kimani Wamatangi has called for an audit that he says has already revealed the existence of ghost workers.
In Vihiga County, a workforce audit unearthed 48 ghost workers who are earning Sh2,179,516 every month. The County Public Service Board also revealed that there were 1,145 employees who are on the payroll, costing Sh33 million, but were not found at their workstations at the time of the physical audit, raising the probability of more ghost workers.
Special salaries
In Machakos County, a recent Auditor-General’s report found that 229 officers received dubious salary arrears twice, while a further 237 were paid both basic and special salaries without supporting documents. The county also failed to deduct tax from 1,226 workers’ salaries.
Taita-Taveta governor Andrew Mwadime also initiated a forensic audit of the county’s human resource department.
“The workers are key to effective service delivery. To streamline the challenges, we will establish numbers, authenticity and suitability of workers in the payroll. We must make sure money needed to sort out workers’ issues is not going to ghost employees,” he said.
His Murang’a counterpart Irungu Kang’ata also created a task force to undertake a staff and payroll audit.
Governors Susan Kihika (Nakuru), Gideon Mung’aro (Kilifi) Paul Otuoma (Busia), Simba Arati (Kisii) and Kenneth Lusaka (Bungoma) have said they are in the process of auditing their staff payrolls and doing headcounts to weed out ghost workers.
Facilitate investigations
EACC has requested the new governors to work with it by informing them of the graft schemes they come across to facilitate investigations. It further challenged the new county chiefs to strengthen accountability systems in the devolved units to seal all loopholes used to embezzle public funds and other malpractices.
“We have taken note of the serious allegations of ghost workers .... We have taken up the matter for investigations. Persons found culpable will be dealt with in accordance with the law,” EACC said in a recent statement.
Data from Controller of Budget Margaret Nyakang’o indicates that the 47 counties received Sh289.6 billion in the first nine months of the 2021/2022 financial year, against budget estimates of Sh528.5 billion. The counties spent a total of Sh139 billion on personnel emoluments.
