Controller of Budget Margaret Nyakang'o has flagged use of manual payroll by Nairobi county, which she says has exposed public funds to abuse.
The controller says in her latest report that the county paid out at least Sh306 million manually in a manner that is not accountable and in violation of the rules set to govern handling of public money.
The amount operated through the method accounted for 4.3 per cent of the total payroll cost, the report said.
“Personnel emoluments amounting to Sh306.07 million were processed through the manual payroll and accounted for 4.3 per cent of the total payroll cost,” the report reads.
“The manual payroll is prone to abuse and may lead to the loss of public funds where there is a lack of proper controls.
The report says that “the government policy is that salaries should be processed through the IPPD [Integrated Personnel and Payroll Database] system, and the county is advised to fast-track the acquisition of Unified Personnel Numbers for their staff."
“The County Public Service Board should regulate staff engagement on contract and casual workers as provided under Section 74 of the County Governments Act 2012,” the report reads.
The report recommends that the county should strictly engage the approved staff in its payroll in executing county functions rather than outsourcing through contracts and short-term casuals whose compensation is done outside the regulated channels.
This is to avoid irregular handling of money and stemming ghost workers.
“[T]here should be strict compliance with the approved staff establishment.”
The report also criticises the county for accumulating excessive pending bills, a situation it says is worsening and putting public services and resources in jeopardy.
The pending bills for Nairobi county had reached the Sh100 billion mark by December 2022.
The report says that the accumulation was despite the county’s revenue bank balance reading Sh650 million which it ought to have used to settle some of the debts.
“[The county has accrued] high level of pending bills which amounted to Sh100.36 billion as of December 31, 2022. This is despite the availability of cash in the CRF account, which stood at Sh653.0 million at the end of the first half of FY 2022/23,” the report said.
“The county leadership should take charge of the worsening pending bills situation to ensure genuine bills are paid without delay in the remaining period of the financial year.”
Further, the controller is complaining that the county has dismal revenue collection record and has to do more to shore up its own source revenue basket and to ensure that its budget is fully financed.
In 2022-23, the county generated Sh2.73 billion in own source revenue against its target of Sh19 billion.
The county was also blamed for poor budgetary practice that saw spending above the CoB set guidelines but with little or no impact for the citizens.
“The underperformance of own-source revenue at Sh2.73 billion against an annual projection of Sh19.25 billion, representing 15.0 per cent of the annual target,” the report says.
“Diversion of funds by the county treasury and poor budgeting practice as shown in Summary of Budget and Expenditure by Economic Classification. The county should address its own source revenue performance to ensure the approved budget is fully financed.
“The county treasury should improve the vote book and budgetary control to ensure that expenditure is within the CoB-approved exchequer issues. Further, all revenues should be banked in the CRF according to Section 109 (2) of the PFM Act, 2012.”
