World Bank warns of excessive public servant per diems wasting billions

The government is under growing criticism for spending billions of taxpayers’ money on daily travel allowances for public servants, even as the country’s economy faces serious challenges.

Data reveals that when civil servants travel to the United States, they receive about $513 (Sh66,317) per person every day.

This spending on travel allowances is part of a larger issue of uncontrolled expenditure at a time when Kenya’s fiscal health is fragile, and the risk of debt distress remains high.

According to a World Bank advisory, travel allowances accounted for 14% of total government expenditures in the fiscal year 2022/23.

The advisory highlights that about 60% of wage costs go to salaries of permanent employees and elected or appointed officials, while 30 percent covers remunerative allowances, and 10% goes to facilitative allowances.

The World Bank points out that lack of control and weak enforcement of the Salaries and Remuneration Commission (SRC) rules on pay and allowances have led to misuse of funds.

"A critical issue in the current remunerative allowance practice is the market adjustment component that is potentially leading to double compensation. The original intent of the market adjustment was to ensure that compensation reflected prevailing market rates for specific skills until these rates could be incorporated into the basic salary," the World Bank stated in its Policy for Growth and Job document.

"This adjustment is now being captured in the market adjustment and basic salary, however, leading to potential double counting."

The advisory also warns that excessive use of facilitative allowances has caused inefficiencies in the public wage bill and civil service operations.

"These allowances have been used to supplement basic pay rather than as rewards for specific jobs or work performance. This undermines productivity as staff are frequently absent from their duty stations since the system creates incentives to seek per diems," the document added.

In the fiscal year 2022/23 alone, spending on Daily Subsistence Allowance (DSA) reached Sh6.2 billion, which is about 32 percent of the total Sh19.6 billion spent on travel-related costs.

The Office of the Auditor General’s audit findings reveal widespread overuse of DSA, which does not meet value-for-money standards.

The allowance system has encouraged the rise of many committees and meetings, causing delays in decision-making and administration.

To improve efficiency, the World Bank recommends regulating how often officials travel and where workshops take place within the country.

It also suggests reviewing budgets for travel and conference expenses and standardizing DSA across job grades where possible.

"If the per diem and accommodation rates are standardised across all job groups using rates from Ministries, Departments and Agencies, the average daily cost per officer drops to $326 (Sh42,162), a saving of $187 (Ksh24,187) per day," the policy document noted.

"If the rates are standardised across all job groups using the UNDP rate, the average daily cost per officer is $460, a saving of $53 per day relative to the current average expenditure."