Auditor General Nancy Gathungu
has exposed what could be wanton
theft of public money in payroll
fraud in the counties.
In a devastating report, Gathungu
says county governments are manipulating payroll systems, syphoning
public cash.
In some counties, employees share account numbers, while some
devolved units have retained staff
long past their retirement age, triggering concerns about the “hygiene”
of the payrolls.
In addition, most counties use
manual payroll systems, which are
prone to manipulation, abandoning
the required Integrated Payroll and
Payroll Database (IPPD) introduced
to weed out ghost workers.
The revelations are contained in
the Auditor General’s report, which
has detailed the revelations in the
latest audit for the county executives
for the financial year ending June
30, 2024.
In Homa Bay, 52 officers share
bank accounts, the report reveals.
“Review of the payrolls revealed
that various officers shared bank accounts during the year under review,”
the report reads.
In July 2023, four officers shared the same account details. In December 2022, the number
increased to 22, before declining to
14 in March last year.
“This was an indication of irregularities and internal control weaknesses over the payroll management
processes,” the report reads.
In Bomet, the audit reveals the
county paid 12 officers a combined
monthly salary of Sh8.64 million in
shared bank accounts.
“This was contrary to section C.I
(2) of the Human Resource Policies
and Procedures Manual for the
Public Service which states that all
officers will be paid salaries every
month in Kenya currency through
their respective bank accounts,” the
report reads.
SPECIAL ALLOWANCES
Further, the county paid “special”
house allowances amounting to
Sh33.54 million to 870 officers.
This is in addition to allowances as
approved by the Salaries and Remuneration Commission.
In Kisumu, the county retained
79 officers who have attained the
retirement age of 60 in its June 2024
payroll without justifiable reasons.
“This was contrary to Gazette Notice of Human Resource Policies and
Procedures Manual for the Public
Service, 2016,” the report reads.
The policy provides that all employees shall retire from the service
on attaining the mandatory retirement age of 60 or 65 for persons with
disabilities, or as may be prescribed
by the government from time to time.
In Nyeri, the county paid salaries amounting to Sh268.587 million
through a manual system, contrary
to a Treasury circular that required
all allocation of personnel emoluments to be supported by IPPD.
The situation is the same in Samburu, where the county pays 350
officers outside the IPPD payroll
system.
In Trans Nzoia, the report revealed irregular recruitment of 258
employees.
“However, there was no evidence
of vacancy declaration for the positions while the management did not
provide an approved staff establishment to guide the number of staff
and cadres the entity is authorised
to have,” the report says.
Embu did not remit funds to
statutory bodies for a record two
years despite making deductions of
Sh431.80 million from employees’
salaries.
They include deductions for contributions to the Local Authorities
Provident Fund, Local Authorities
Pension Trust Fund, Housing Levy,
savings and loans repayment to different saccos and banks.
Others are union dues, Helb, statutory deductions, staff welfare associations, insurance policy deductions
and the county pension fund.
“This was contrary to section (19(4)(5) of the Employment Act,
2007, which stipulates that an employer who deducts an amount from
an employee’s remuneration shall
pay the amount so deducted by the
period and other requirements specified in the law,” the report reads.
In Machakos, the county paid
Sh487 million in salaries through
the manual system.
In addition, payroll data revealed
that two employees in the county
executive shared the same bank account number.
OVERSHOT SPENDING
In Laikipia, the county overshot its
spending on temporary employees by
Sh17.31 million. No explanation or
justification was provided.
In Nakuru, the county retained
77 officers on its payroll and paid
them Sh36.16 million during the year,
despite the group having attained
mandatory retirement age.
In Narok, the auditor flagged irregular hiring of 73 officers, including clerical, enforcement, trade, development and administrative staff.
The county did not provide evidence of any staff establishment or
proof that it followed due process.
“The county public service board
recruited the above employees without conducting any interviews to assess the suitability of the candidates,
contrary to article 232(1)(g) of the
Constitution of Kenya,” the audit
report read.
In Vihiga, the auditor revealed
an excessive wage bill, which now
stands at 47 per cent of the county’s
revenues.
The county is also flagged for irregular hiring of 670 casuals.
Some 672 employees were serving
probation periods of as long as 16
years.
In Mombasa, the county has
retained 96 employees who have
attained the mandatory retirement
age of 60.
This is also the case in Kilifi, where
26 overage employees are still on
the payroll.
In Nyandarua, the county paid
Sh57.77 million salaries outside
IPPD.
In Tana River, the auditor exposed skewed ethnic composition
of the county staff and payment of
workers over two-thirds of their
basic salary.
Some 331 employees had salary
deductions in excess of two thirds of
their basic pay in breach of section
19 (3) of the Employment Act, 2007,
which prohibits excessive deductions.
In Lamu, the auditor flagged excessive wage bill.
The county’s wage
bill stands at 39 per cent of its revenues against the requirement of 35.
It also paid staff through a manual
payroll.
