Three State agencies have been flagged for exceeding their payroll budgets in the year ending June 2024, despite operating with fewer staff than required, exposing glaring inefficiencies in managing public-sector wages.

The Kenya Forest Service (KFS), Tourism Regulatory Authority (TRA), and National Biosafety Authority (NBA) all reported crippling staff shortages following a government freeze on new hiring, yet still spent beyond legal limits on employee compensation.

Audit reports by Auditor-General Nancy Gathungu show that these agencies breached the legal ceiling for staff spending, which by law cannot exceed 35 per cent of their revenues. “This was contrary to Regulation 26 (1) (a) (b) of the Public Finance Management Regulations, 2015, which stipulates National Government Entities' compensation of employees should not exceed a maximum of 35 per cent of revenue,” Gathungu noted.

The situation is especially notable as these agencies were already understaffed. Normally, staff numbers for State agencies are approved by the National Treasury, while salary rates are determined by the Salaries and Remuneration Commission. The overspending, therefore, points to possible overcompensation through inflated salaries, irregular promotions, unapproved allowances, or a concentration of highly paid officers.

The Kenya Forest Service, for instance, operated with 20 per cent fewer staff than authorized yet spent Sh5.7 billion on payroll, consuming 61 per cent of its Sh9.3 billion revenue. This represents an overshoot of about 75 per cent. The Tourism Regulatory Authority had 38 per cent fewer staff but spent Sh208 million in wages, 44 per cent of its revenue, exceeding its payroll by Sh42 million. Meanwhile, the National Biosafety Authority worked with 28 per cent fewer employees but spent 44 per cent of its revenue on salaries, surpassing the limit by Sh20 million.

In total, the three agencies illegally spent over Sh2.4 billion on staff compensation amid a government-wide wage bill increase that prompted a freeze on new hiring across State agencies and departments.

The audit highlights a paradox in public-sector management: agencies struggling with staff shortages while simultaneously mismanaging available payroll funds. It raises urgent questions about oversight, accountability, and the need to enforce financial discipline in State entities.