39 county governments, including Nairobi and Mombasa, are in the spotlight for spending over the set 35 per cent of their total revenue to pay salaries in the 2024/2025 financial year.
This anomaly was flagged by the Controller of Budget, Margaret Nyakang'o, in the County Governments' Budget Implementation Review Report for the fiscal year ending in June, in which Ksh220.64 billion was used by counties for employee compensation.
"Regulation 25(1)(b) of the PFM (County Governments) Regulations, 2015, limits County Government expenditures on wages and benefits to 35 per cent of the County’s total revenue," the report read in part.
"The Controller of Budget observed that only eight County Governments adhered to the 35 per cent ceiling for employee compensation to actual revenue."
In the report, only eight counties stayed under the ceiling, with Kilifi using the least amount to pay salaries at 24 per cent, Siaya at 26 per cent and Tana River at 27 per cent.
Nakuru followed with 30 per cent, then Kwale with 31 per cent, Uasin Gishu with 32, Nandi and Nyandarua with 33 per cent.
The Ksh220.64 billion used in salaries represents 47 per cent of their total expenditure of Ksh470.23 billion and 41 per cent of the realised revenue of Ksh533.11 billion.
Of the 39 counties that overspent, Nyeri County recorded the highest amount, using 55 per cent of its revenue for salaries, a total of Ksh4.51 billion.
Machakos followed with 54.5 per cent, then Baringo with 53.4 per cent and the Tharaka Nithi with 53 per cent. Elgeyo Marakwet, Homa Bay, Kajiado and Taita Taveta all used 51 per cent of their revenue to
Nairobi County followed at position nine with 50.8 per cent, and Lamu County closed the top 10 spenders with a flat 50 per cent.
Other counties with considerably high percentages were Mombasa and Kisumu, with 47 and 48 per cent of their respective revenues for employee compensation.
Other Payroll Issues
Besides spending way above the budget to cover the payroll, the CoB also flagged the high proportion of health sector wage bill to the total wage bill, recommending they mobilise additional funds for the sector in collaboration with other stakeholders, including the national government.
She also flagged the prevalence of manual payrolls, with Ksh10.7 billion, about 5 per cent of the total expenditure on employee compensation processed manually.
There was also an issue of failure of requisition for June 2025 salaries, as 16 County Governments failed to despite receiving the full equitable share of nationally raised revenue.
