Controller of Budget Margaret Nyakang’o speaks during the 5th Legislative Forum held at the Edge Convention Center on March 18, 2025.
Twelve years into devolution, bloated payrolls and soaring administrative costs continue to undermine service delivery and development in many counties.
Most counties are spending billions on salaries, wages, allowances and operational expenses, funds that should be channeled into development, raising concerns that devolved units are turning into cash cows for officials rather than engines of grassroots transformation.
Reports by the Auditor General, Controller of Budget and Salaries and Remuneration Commission (SRC) show that many counties allocate between 60 to 70 per cent of their total revenue to recurrent expenses, far exceeding the legal cap of 35 per cent stipulated in the Public Finance Management Act, 2012.
The data paints a grim picture as counties, instead of fostering development, have morphed into “employment bureaus,” characterised by unchecked spending on wages and bureaucracy.
The Senate County Public Accounts Committee chaired by Senator Moses Kajwang’ has sounded the alarm, calling the trend dangerous and unsustainable.
"Counties that are paying more on salaries and allowances have little left for development. Most counties are now living for salaries, wages, allowances and administrative costs, stifling development. This is a dangerous trend," said Senator Kajwang.
The committee has urged governors to comply with the Public Finance Management Act and prioritise development spending so Kenyans can reap the benefits of devolution.
The law mandates that salary and allowance expenses for both county executives and assemblies should not exceed 35 per cent of total revenue.
A glaring example is Nakuru County which plans to spend Sh14 billion of its Sh20.7 billion 2025/2026 budget on salaries and recurrent costs.
Only Sh6 billion is earmarked for development. This translates to over 66 per cent of the budget going to recurrent expenses making it one of the highest ratios in the country.
According to the budget estimates before the county assembly, Nakuru’s wage bill alone is projected to reach Sh8.1 billion, accounting for about 40 per cent of the county’s total budget and breaching the 35 per cent legal threshold.
“The county has allocated Sh14billion of its total budget for salaries and recurrent expenditures. The county expects to generate an Own Source Revenue of Sh4.6 billion," reads part of Budget documents.
When Nakuru Governor Susan Kihika took office in the 2022/2023 financial year, the wage bill stood at Sh6.3 billion. Without corrective action, it could reach alarming levels.
Over the past two years, Nakuru has added more employees to its payroll which originally had about 5,000 staff. The county has breached the 35 percent expenditure cap for over six years.
But Nakuru is not alone as many other counties are grappling with ballooning wage bills.
According to SRC data for the second quarter of the 2024/2025 financial year (October–December 2024), as well as reports from the Auditor General and Controller of Budget, counties continue to channel a disproportionate share of their funds to salaries and administrative operations.
Controller of Budget Margaret Nyakang’o reports that counties spent Sh151.26 billion on recurrent expenditure in the first half of 2024/2025, up from Sh143.72 billion in the same period the previous year.
In contrast, only Sh33.6 billion was spent on development. Of the total recurrent expenditure, Sh102.32 billion went to personal emoluments while Sh48.95 billion was spent on operations and maintenance.
The Auditor General and Controller of Budget reports shows that Counties with the highest non-compliance levels include Kisii, led by Governor Simba Arati, whose wage bill stands at 60 per cent.
Mombasa follows at 57 per cent and others breaching the threshold include Nyeri, Nairobi, Elgeyo Marakwet, Laikipia (all at 55 per cent), Machakos and Nyamira (55.2 per cent), Taita Taveta (53.2 per cent), Tharaka Nithi (52.3 per cent), Murang’a (54 per cent), and Homa Bay (53 per cent).
Kisumu, Kericho, and Bomet are also listed for excessive salary spending.
Only five counties meet the legal wage bill-to-revenue ratio Kilifi (26.2 per cent), Tana River (29.4 per cent), Busia (31.0 per cent), Narok (32.0 per cent), and Kwale.
In March 2025, the Auditor General flagged widespread payroll fraud across county governments. Issues highlighted included shared bank accounts, irregular hiring practices, and continued use of manual systems that are prone to manipulation.
That same month, Ms Nyakang’o released new guidelines aimed at taming the wage bill and improving fiscal discipline across both counties and national government institutions.
While appearing before the Senate Finance Committee, she said her office will enforce compliance with the 35 per cent wage bill threshold by June 30, 2028.
She emphasised that unchecked public wage bills are consuming too much of the country’s finances, leaving little room for development.
The new guidelines require all government entities to refine their strategies and action plans to align with wage bill targets. Her office will conduct quarterly reviews of personnel emoluments to ensure strict adherence.
