Audit exposes state agencies overspending on salaries despite severe staff shortages

Three major State agencies have been flagged for overspending on salaries despite operating with significant staff shortages, raising concerns over payroll management in the public sector.

A new report by Auditor-General Nancy Gathungu shows that the Kenya Forest Service (KFS), Tourism Regulatory Authority (TRA), and National Biosafety Authority (NBA) all exceeded the legal wage bill limit in the year ending June 2024.

Public Finance Management Regulations set a ceiling of 35 per cent of revenue for employee compensation in national government entities. However, KFS, with 20 per cent fewer staff than approved, spent Sh5.7 billion on salaries, 61 per cent of its Sh9.3 billion revenue, overshooting the cap by about 75 per cent.

TRA, which was operating with 38 per cent fewer workers, paid Sh208 million in salaries, 44 per cent of its revenue, overspending by Sh42 million. NBA, despite a 28 per cent staff shortage, spent Sh98 million on wages, breaching the cap by Sh20 million.

The three agencies collectively spent more than Sh2.4 billion above legal limits on staff compensation. Gathungu noted the breaches point to possible irregular allowances, inflated salaries, or overpayment of senior officials.

“This was contrary to Regulation 26(1)(a)(b) of the Public Finance Management Regulations, 2015,” she stated.

The findings come amid a government-wide wage bill surge that has triggered a freeze on new recruitment. Analysts warn the paradox of payroll overspending in understaffed agencies raises urgent questions about accountability and enforcement of financial discipline.