The headquarters of the Nairobi City County Government offices on City Hall Way.
The use of manual payroll, non-regulation of contract staff and casual workers, as well as failure to observe strict compliance with approved staff establishment, have been cited as at the heart of ballooning wage bills in counties, a new report has shown.
The report by the Commission on Revenue Allocation (CRA) flagged Nairobi, Kisumu and Kisii counties as the worst culprits in the last five years, turning the devolved units into employment bureaus.
According to CRA, more than 80 percent of the three counties’ expenditure went towards payment of salaries and wages with the devolved units spending on average less than 20 percent of their budgets on development programmes between the financial year ended June 2021 and 2025.
Governor Johnson Sakaja’s Nairobi is the worst culprit, having spent a paltry 13.1 percent of its budget on development programmes over the period.
Kisumu, under Governor Anyang’ Nyong’o, comes second with 18.2 percent, and Simba Arati’s Kisii County is third with 18.6 percent.
The law requires that at least 30 percent of a county government’s annual budget be set aside for development programmes.
Section 107 of the Public Finance Management Act, 2015 requires county governments to allocate a minimum of 30 percent of their total budget to development expenditure and at most 35 percent on the wage bill.
CRA Chairperson Mary Chebukati said a majority of county governments have been unable to meet legal requirements on the wage bill and development expenditure.
Commission on Revenue Allocation chairperson Mary Wanyonyi Chebukati during an Intergovernmental Budget and Economic Council meeting on January 29, 2024.
Since the financial year ended June 2014, the proportion of personnel emoluments to total expenditure has remained high, with the proportion of development to total expenditure remaining low.
The report showed that over the last five financial years, the county governments’ average annual expenditure was Sh429 billion, with recurrent taking the lion’s share at Sh320 billion or 74.6 percent, where a larger proportion of the expenditure is on personnel emoluments. On the other hand, a measly Sh109 billion is left for development programmes.
“The county governments’ actual development expenditures over the five years from 2020/21 to 2024/25 averaged 25.4 percent,” said Ms Chebukati.
On the flipside, eight counties have been within the law with their development expenditures above the 30 percent minimum level, with Marsabit County having the highest development expenditure at 39.5 percent.
Others are Mandera, Trans Nzoia, Kilifi, Kwale, Uasin Gishu, Homa Bay and Siaya Counties with an average of between 30.1 percent and 33.7 percent over the five years.
The CRA boss observed that during budgeting, all counties adhere to the law by allocating 30 percent of their budgets to development, but a majority fail to adhere to the requirement during budget implementation.
During the five years, a significant proportion of most county governments’ recurrent expenditure was on wage bill, with only three counties – Tana River, Mandera and Kilifi – having their expenditure of personnel emoluments within the law at 31.8 percent, 33.9 percent and 34.7 percent, respectively.
“Kisii County had the highest expenditure on personnel emoluments at 61.7 percent, followed by Kisumu at 59.2 percent and Machakos at 58.4 percent,” said Ms Chebukati.
The CRA report corroborates one by the Controller of Budget, which fingered counties for spending a staggering Sh43.7 billion on staff salaries and wages in only three months.
The amount represented more than 80 percent of Sh54.25 billion released by the Exchequer for expenditure between July and September 2025.
Interestingly, during the reporting period under review, some 20 counties did not spend even a shilling on development programmes, with the remaining county governments spending a paltry Sh3.7 billion on development during the period under review.
With several reports indicting counties for slowly becoming employment bureaus and ethnic enclaves, the Public Service Commission (PSC) recommended reforms in the hiring of public servants in both the national and county governments.
Counties have continued to breach various provisions that guide recruitment in public service by hiring the majority of staff from the dominant ethnic group, as well as going above the set ceiling.
Governors during the Biennial Devolution Conference at Eldoret Sports Club in Uasin Gishu County on August 17, 2023.
In the exit report submitted to President William Ruto, outgoing PSC Chairperson Anthony Muchiri recommended that County Public Service Boards cede some mandate to the PSC.
The report said PSC should be handed the oversight role to supervise inter-county transfers to ensure mobility, uniform standards and alignment of public service.
Mr Muchiri said the Boards operate autonomously, often leading to inconsistency in recruitment standards, discipline and talent development.
“One area of missed opportunity in the current constitutional design is the fragmentation of the public service human resource function. In hindsight, it would have been prudent for the framers of the Constitution to give the PSC oversight over higher-level HR functions in counties, including the power to effect inter-county transfers,” said Mr Muchiri.
“This would ensure mobility, uniform standards, better alignment of public service values across the national and devolved units and particularly, a reduction of appeal cases received from Counties that are currently on a surge at the PSC.”
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