Salaries crisis as counties, teachers await delayed cash

Mombasa woman representative Mishi Mboko joins teachers a protest during the recent strike. They will have to wait longer for their September salaries as a cash crunch has hit the Government. FILE PHOTO | NATION MEDIA GROUP

What you need to know:

  • Almost two weeks after end month, over 240,000 teachers are yet to receive their salaries, despite a court order that the government makes the payments without further delay.
  • Nairobi County Governor Dr Evans Kidero confirmed that there was a problem which had resulted in the lengthy delay of pay for tens of thousands of workers on the county payrolls.
  • Delays in payment of teachers affect every village and town in the country because teachers are among the few regularly salaried officials in the counties and failure to pay them has a knock-on effect on local economies.

Thousands of workers are yet to receive their September salaries as the government grapples with a cash crisis, which has raised tough questions about the state of fiscal management at the Treasury.

All 47 counties have been affected by the problem, which has also spread to several key institutions and programmes which have been starved of cash due to delays in disbursement of funds from the Treasury.

The Higher Education Loans Board and the free primary and secondary education programmes are among those which have been affected.

Almost two weeks after end month, over 240,000 teachers are yet to receive their salaries, despite a court order that the government makes the payments without further delay.

The crisis was the subject of a meeting between Treasury PS Kamau Thugge and officials of the Kenya Revenue Authority, which has fallen short of its tax collection targets in the first quarter.

THERE IS A PROBLEM

Nairobi County Governor Dr Evans Kidero confirmed that there was a problem which had resulted in the lengthy delay of pay for tens of thousands of workers on the county payrolls.

“Yes, there is a problem and it cuts across all the 47 counties. Up to now we have not paid salaries. We expected to receive the money in the last week of last month but, up to now, the money has not come,” said Dr Kidero.

In Kiambu, county executive for Finance and Economic Planning Ms Mary Nguli issued a circular to all accounting officers and the clerk of the County Assembly on Thursday outlining the problem.

“As some of you may be aware, due to some unavoidable circumstances, the national government has not yet released exchequer’s payment of salaries including other operating expenses,” read the circular which advised the officers to pass the information to all staff and concerned institutions. “Though the delay is a national issue affecting all counties, the county treasury is in constant touch with the relevant institutions to ensure prompt payment of salaries immediately we receive the exchequers.”

Low revenue collection, high interest rates which have depressed borrowing and diminished economic activity and an unfavourable exchange rate have been cited as the reasons the Treasury has run low on finances.

High expenditure on servicing the country’s huge debt obligations is another issue especially after the dollar exchange rate shot up, meaning Kenya is paying more in dollar terms than the initial amount borrowed.

ONLY MCAs PAID

It is understood that in some of the counties which have not paid staff, only MCAs have received their salaries.

The Sunday Nation has established that operations of county governments have equally been affected with procurement and supplies being worst hit.

In Machakos County,  about 100 contractors and suppliers have given the county government seven days to pay up the debts owed to them amounting to close to Sh2 billion.

Under their newly-formed Machakos County Contractors and Suppliers Association, the members said they would write a memorandum to Governor Alfred Mutua to demand their payments, some of which they said had accrued since 2013.

Association chairman Barclay Mutinda said the county government should stop any ongoing contracts until all the pending debts to contractors have been settled.

“The delay in payment has led to financial ruin of our members, resulting in loss of property through auctioning, listing at the Credit Reference Bureau, illness and in some cases even  stress and death,” said Mr Mutinda.

Governor Mutua is out of the country but a source close to the governor confirmed the concerns, but added that the national government was to blame for the delay in disbursement of funds to the counties.

On Friday, Dr Thugge played down reports of a crisis, blaming bureaucratic delays for the failure to pay MPs and parliamentary staff on time.

He expressed optimism that KRA would step up the rate at which it was collecting tax later in the year.

But many government departments are in the meantime labouring under the problem of delayed disbursement of funds. Teachers are among those worst hit by the crisis.

ACTIVITIES GROUNDED

Delays in payment of teachers affect every village and town in the country because teachers are among the few regularly salaried officials in the counties and failure to pay them has a knock-on effect on local economies.

Development projects have also been affected. In Meru County Government, the Sunday Nation confirmed from sources among the staff that procurement has been put on hold due to the crisis. “A lot of our activities here are grounded. It is a big problem, I can confirm, because currently we are not procuring and suppliers are really on our case. That I can confirm.”

Measures have, however, been put in place in some of the counties to ensure that payments to staff are not affected regardless of the situation.

The Sunday Nation learnt that private arrangements were made with banks in some counties to ensure that salaries are taken care of from other sources, even when there was no money.

Counties, through the Council of Governors, have exerted pressure on the national government to release funds to help them manage their operations.

Siaya Governor Cornel Rasanga said they were yet to receive any money from the national Treasury since the financial year began in June.

“We have been surviving on roll-over funds. The situation means scaling down on development projects while staff are forced to wait longer for salaries,” he said.

CLARIFICATION SOUGHT

Contacted, the Union of Kenya Civil Servants Deputy Secretary-General Jerry Ole Kina said the union was seeking a clarification from the authorities.

He said the union is checking on the counties and will give a full report tomorrow although it also blamed poor management across the board. “It’s a problem with the counties, they were given money and they decided to use it on other things,” he said. “We cannot condemn all of them because some have actually paid their staff.”

The union official said no county should blame the Exchequer for the crisis, arguing that all money for staff payments was released to counties.

“If they talk about the Exchequer, they are not telling the truth because no money is being held by the Exchequer. It is only the money for development that they don’t have,” he said.

It is understood that some counties have been using the development money to pay allowances to staff and MCAs.

While the national government had paid its employees by the fifth day of the month, teachers, who were on strike for most of last month, have not been paid their September salaries. Their Sacco contributions have also not been remitted to their various Saccos since July.

MPs' SALARIES DELAYED

The Sunday Nation also confirmed that even Members of Parliament and parliamentary staff were affected as their September salaries were delayed.

An MP said the delay in parliamentary pay was a source for concern.

“I know our payslips were out a week ago and I received mine. But I am yet to confirm if the money has been wired to the account. Three days ago I confirmed it wasn’t there,” he said.

A member of staff at the National Assembly confirmed that the September salaries for all staff were also delayed and were only paid on Thursday.

Programmes which have been worst affected by the crisis are the free primary and secondary school education, the CDF, rural electricity connection and some commissions.

Council of Governors chairman Peter Munya said counties were finding it hard to cope.

“Most counties have not received the second disbursement from the national treasury,” Mr Munya said.