Counties collectively spent Sh118.65 billion on personnel emoluments in the 2015-2016 financial year, the office of the Controller of Budget has revealed.
According to the annual Budget Implementation Report prepared by Controller of Budget Agnes Odhiambo, county government spending on personnel emoluments accounted for 40.2 per cent of total expenditure.
"In FY 2015-16, the county governments spent an aggregate of Sh118.65 billion on personnel emoluments, which accounted for 40.2 per cent of the total expenditure for the period and an increase by 15.1 per cent from Sh103 billion incurred in FY 2014-15," the report notes.
The overall expenditure by counties during the 2015-2016 financial year increased to Sh295 billion from the Sh258 billion reported in 2014-2015.
This was driven by increased absorption of funds allocated to development and recurrent expenditures.
The total recurrent expenditure reported by counties was Sh191 billion, which comprised Sh118 billion for personnel emoluments and Sh73 billion for operations and maintenance.
The recurrent expenditure has risen from the Sh132 billion reported in the first year of devolution, majorly driven by employment of staff in the counties.
County spending on development also reported tremendous increase - from a paltry Sh36 billion in 2013-2014 to Sh95 billion in 2014-2015. In the last financial year, counties reported Sh103 billion spending on development.
"With regard to development expenditure, the counties incurred Sh103.45 billion translating to an absorption rate of 65.2 per cent of the annual development budget, an improvement from 62.4 per cent recorded in FY 2014-15," the report revealed.
ABSORPTION RATES
The analysis of development expenditure shows that Bomet, Mombasa, Wajir, Murang'a, Tana River and West Pokot counties reported the highest absorption rates.
On the other hand, Nairobi City County, which reported Sh13.47 billion, followed by Nakuru and Kiambu counties at Sh4.80 billion and Sh4.75 billion respectively, were the highest spenders on salaries and wages.
However, some counties spent more than the stipulated 35 per cent of the total expenditure on personnel emoluments during the financial year.
Mandera, Tana River, Turkana, Marsabit, Kwale, Wajir, Kilifi, Kitui, Lamu, Siaya, West Pokot, Samburu, Trans Nzoia, Nyandarua, Garissa, Kajiado, Bungoma and Nandi spent below the 35 per cent cap.
Ten counties used more than 50 per cent of their total expenditure on salaries and wages.
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According to the report, the escalating salary costs were occasioned by continuous staff recruitment in various counties and may result in unsustainable salary costs.
This is contrary to the Public Finance Management Act (County Governments) Regulations-2015, which caps spending on personnel emoluments at 35 per cent of total expenditure.
"There is need for county governments to ensure that expenditure on personnel emoluments is contained at sustainable levels and in compliance with Regulation 25(1)(b) of the Public Finance Management (County Governments) Regulations 2015," the report noted.
The report also shows that counties incurred Sh73 billion on operations and maintenance, where Sh11 billion was spent on domestic and foreign travel. This was an increase from Sh9.15 billion the counties spent in the 2014-2015 financial year.
In addition, counties spent Sh2.82 billion on MCA sitting allowances against an allocation of Sh3.45 billion. In 2014-2015, counties spent Sh2.94 billion.