Ksh5.7bn salaries paid outside payroll- Budget controller

The results of an assessment of salaries paid by ministries, departments, and agencies in the nine months leading up to March 2023 cast doubt on the government’s resolve to make pay bill spending transparent.
Due to difficulties with manual payroll processing, the government has in the past paid phantom workers with billions of shillings each year.
“A review of recurrent spending reveals that 40.3% of MDAs’ total gross recurrent expenditures, or Ksh399.96 billion, were spent on employee remuneration. The Integrated Personnel and Payroll Database and other authorized payroll management systems processed Ksh363.66 billion, according to further study., Ksh5.66 billion was paid out of the established payroll management system.” according to the COB
Governmental liquidity problems that resulted in delays in paying some civil servants’ salaries in March of this year coincided with the State agencies’ payment of salaries outside the payroll system.
The third quarter of the fiscal year 2022–2023, from January to March, had a nearly Ksh16.55 billion increase in the national government’s pay bill.
This indicated the strain on spending brought on by new appointments made by President William Ruto’s government. The new administration, for instance, nominated 50 chief administrative secretaries and expanded the number of State departments from 44 to 51.
The number of State departments, government agencies, and other State offices expanded as a result of an executive order the President issued in January of this year regarding the structure of the government.
For instance, new offices were established under the Office of the President, such as the Council of Economic Advisors, the Women Rights Advisor, and the Fiscal Affairs and Budget Policy offices. The COB stated that it will be able to list agencies with the anomaly at the end of the current fiscal year, even though it was unable to instantly separate MDAs that paid wages outside of the authorized payroll system.
Controller of Budget Dr. Margaret Nyakang’o said in an interview that “we will annex MDAs with payments outside the prescribed payroll system and reasons thereof to the yearly national government budget implementation review report.”
The integrated staff payroll database, which was created in the 1996–1997 fiscal year, is one of the approved payroll systems that MDAs must use to process salaries.
The method was designed to deal with the difficulties of manual payroll administration, which had been described as onerous, leading to paycheck delays, inaccurate staffing level determination, and poor financial accountability. The fundamental goal of the system is to keep public sector personnel data accurate and uniform.
“Prior to the creation of IPPD, establishing personnel issues pertaining to government employees, such as recruitment, training, postings, transfers, seniority lists, promotions, and retirement, was challenging. Additionally, the Ministry of State for Public Service at the time indicated in a study that prompt pay determination, implementing statutory deductions, processing loan and advance requests, and ensuring their recovery were difficult. The amount spent by MDAs on salaries during the most recent review period increased by 8.5% to Ksh399.935 billion from Ksh368.506 billion at the same time last year.
The Ministry of Defense, the Independent Electoral and Boundaries Commission, the Office of the Registrar of Political Parties, the State Department of Public Service, and the Director of Public Prosecutions saw the largest increases in pay spending.
However, the COB claims that the reason for the more than 10-fold increase in salaries under the State Department of Public Service from Ksh499.75 million in the previous nine-month review to Ksh6 billion was the classification of employer contributions to the National Health Insurance Fund and the National Social Security Fund as part of the compensation to employees.
The August 2022 General Election was being held at the same time as the IEBC increased its salary spending, necessitating an expansion of its human resources team.
The National Gender and Equality Commission and the Commission of Revenue Allocation both spent more money on salaries than was budgeted for during the time, bringing the total amount paid in salaries and benefits to constitutional offices that are covered by the Consolidated Fund Services to Ksh2.6 billion.