Audit reports reveal that the Kenya Forest Service, the Tourism Regulatory Authority, and the National Biosafety Authority overshot their allotted staff budgets.
Three State agencies reported crippling staff shortages in the year to June 2024 following a freeze on new hiring, but still exceeded their payroll budgets, exposing inefficiencies in managing public-sector staff costs.
Audit reports reveal that the Kenya Forest Service (KFS), the Tourism Regulatory Authority (TRA), and the National Biosafety Authority (NBA) overshot their allotted staff budgets for the year, despite being among several agencies that are currently understaffed.
Auditor-General Nancy Gathungu.
By law, State agencies may spend no more than 35 per cent of their revenues on staff compensation, a rule meant to safeguard financial prudence. These three, however, breached the ceiling by tens of millions.
“This was contrary to Regulation 26 (1) (a) (b) of the Public Finance Management Regulations, 2015, which stipulates National Government Entities' compensation of employees should not exceed a maximum of 35 per cent of revenue,” noted Auditor-General Nancy Gathungu in the audit reports.
While several other State agencies and parastatals were also called out by the Auditor-General for surpassing their wage bill threshold, the case of these three is particularly unique as they were also found to be operating with fewer staff than they should have.
Staff numbers for State agencies are normally decided and approved by the National Treasury based on available funds allocated to the institution, while remuneration rates are decided by the Salaries and Remuneration Commission.
Inflated salaries
Overspending on wages with fewer staff points to a possible overcompensation through unapproved allowances, inflated salaries, irregular promotions, or an excess of highly paid officers.
The Kenya Forest Service (KFS) rangers mount a guard of honour at their headquarters in Kiambu County.
KFS, which was operating with 20 per cent less staff than it should have during the year, spent Sh5.7 billion on payroll, which is 61 per cent of its Sh9.3 billion revenues. This means that it overshot its wage bill by about 75 per cent.
TRA was operating with 38 per cent less staff, but spent an extra Sh42 million on staff salaries, paying Sh208 million over the year, which was 44 per cent of its revenues.
The NBA also used 44 per cent of its annual revenue on staff payments, despite working with 28 per cent fewer workers than it ought to have. It spent Sh98 million on staff remuneration, exceeding the limit by Sh20 million.
In total, the three companies spent over Sh2.4 billion illegally on staff compensation, amid growing wage bill in the government that triggered a freeze on new hiring in State agencies and departments.
