Commission on Revenue Allocation chairperson Mary Chebukati/ HANDOUT
The Commission on Revenue Allocation has dropped a bombshell for county workers, with a radical call to governors to implement stringent controls, including sacking, to tame the ballooning wage bill.
In an explosive report on the assessment of county finances, CRA has recommended expenditure rationalisation and staff management to limit the wage bill.
“Counties exceeding the statutory limit should implement expenditure rationalisation and workforce management measures to contain recurrent expenditure within sustainable levels,” the commission said.
Indeed, CRA disclosed that the counties themselves had proposed sacking staff.
“Counties proposed measures such as staff rationalisation, payroll audits, automation, hiring freezes and performance-based management to contain wage growth,” the report states.
The development is likely to trigger a backlash from the county workers whose jobs now hang in the balance should governors implement the recommendations.
CRA made the radical recommendations after its review of the county finances exposed a deepening wage bill crisis in the devolved units.
The report, prepared under the leadership of CRA chairperson Mary Chebukati, paints a picture of county governments increasingly struggling to balance salaries, operational expenses and development priorities.
It reveals that 42 counties breached the statutory requirement limiting expenditure on salaries and benefits to 35 per cent of total revenue in the 2024-25 financial year.
“Personnel emoluments emerged as a major concern, with only four counties meeting the legal threshold requiring wage bills to remain below 35 per cent of total revenue,” the report states.
The four counties that complied with the threshold were Siaya, Tana River, Kilifi and Narok.
Taita Taveta emerged as the worst performer, spending a staggering 64 per cent of its revenue on salaries and benefits, almost double the statutory ceiling.
The findings are contained in CRA's review of the County Fiscal Strategy Papers for the 2026-27 financial year, which assessed expenditure, revenue projections, pending bills and compliance with fiscal responsibility principles.
The commission warns that the escalating wage bill threatens the sustainability of county finances and could further cripple service delivery.
The situation appears unlikely to improve significantly in the current financial year.
“Many counties projected wage expenditures above the threshold in FY 2026-27, raising concerns about fiscal sustainability,” the report states.
According to the report, only four counties projected personnel expenditure within the legal threshold in their 2026-27 fiscal strategy papers.
Kilifi projected 31 per cent, while Migori, Kwale and Tana River each projected 35 per cent.
Another 33 counties projected expenditure above the threshold, with Embu recording the highest allocation at 56 per cent.
Ten counties failed to provide wage bill projections.
The commission has, therefore, recommended stringent expenditure controls, including staff rationalisation, payroll audits, recruitment freezes and eliminating ghost workers.
Counties have also proposed introducing biometric payroll systems, restricting recruitment to essential positions and linking remuneration to employee productivity.
The report further states that excessive spending on salaries and operations has left several counties with little money for development.
Nairobi emerged as the worst performer in actual development spending, with recurrent expenditure consuming 88 per cent of its total expenditure in 2024-25.
"Further, it is of great concern that recurrent expenditure in Nairobi stood at 88 per cent, leaving only 12 per cent for development expenditure," CRA states.
Machakos followed with recurrent expenditure accounting for 84 per cent, Kisumu 83 per cent, while Kajiado and Kiambu each recorded 82 per cent.
The commission established that Nairobi allocated an average of only 25 per cent of its budget to development over the three financial years reviewed, falling below the statutory minimum of 30 per cent.
Actual development expenditure was even lower.
Nairobi spent just 12 per cent on development, followed by Kisii at 15 per cent, Kiambu 16 per cent, Kisumu 18 per cent and Mombasa 20 per cent.
In contrast, Marsabit recorded the highest actual development expenditure at 36 per cent, followed by Kilifi at 34 per cent.
Mandera and Trans Nzoia recorded 32 per cent each, while Homa Bay managed 31 per cent.
For the 2026-27 financial year, Meru and Nandi projected development allocations of 26 per cent each, below the statutory threshold.
The report also raises concerns over unrealistic revenue projections, revealing that only 10 counties recorded actual own-source revenue collections within the acceptable 10 per cent deviation from their targets.
The remaining 37 counties recorded deviations exceeding the threshold, exposing weaknesses in revenue forecasting.
"This implies that the counties are not using a scientific approach to estimate OSR projections," the commission states.
Kisumu projected collections equivalent to just seven per cent of its estimated revenue potential, followed by Kwale at 16 per cent and Nyeri at 19 per cent.
The report further exposes the persistent pending bills crisis, with Nairobi reporting Sh88.96 billion in outstanding obligations as of June 2025 in its fiscal strategy paper.
CRA warns that unpaid bills, delayed Treasury disbursements and excessive recurrent expenditure are undermining county development programmes.
The commission has urged counties to prioritise settlement of verified pending bills, strengthen revenue collection and enforce statutory spending limits.
It also wants the Senate to strengthen oversight and ensure counties comply with fiscal responsibility principles.
"Addressing these challenges will enhance fiscal sustainability, improve budget credibility and strengthen the capacity of county governments to deliver quality public services," the report concludes.
