Web of deceit haunts county payroll systems – Gathungu

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.