Our second instalment in the series looking at the lack of fiscal discipline in county governments, we will focus on county governments’ high expenditure on wages or personal emoluments. Our analysis of the Controller of Budget report titled Annual County Governments Budget Implementation Review Report for FY 2017/18 released in September, 2018 identifies an unsustainable and high expenditure on wages and benefits by county governments and cautions that
High expenditure on personnel emoluments is unsustainable and will crowd out spending on development activities
According to the Controller of Budget, “In FY 2017/18, the County Governments spent an aggregate of Kshs.151.09 billion on personnel emoluments (PE), which accounted for 49.7 per cent of the total expenditure for the period. Only three counties: namely Kilifi, Marsabit, and Mandera reported expenditure on personnel emoluments that was within the maximum allowed limit of 35 per cent of their total expenditure“
This limit on a county government’s expenditure on wages is set by the Public Finance Management (County Governments) Regulations 2015.