County workers left in limbo as unpaid dues rise to Sh44.29 billion

Thousands of county employees are staring at an uncertain financial future after devolved governments accumulated more than Sh44 billion in unpaid salaries, statutory deductions and staff-related claims, raising concerns over retirement benefits and exposing counties to possible legal battles.

Data from the Controller of Budget shows that county governments are yet to clear Sh44.29 billion owed to workers.

The amount includes Sh43.64 billion in unpaid salaries and statutory deductions, as well as Sh648.8 million in staff claims that have remained unsettled for more than three years.

The outstanding obligations have particularly raised concern among employees approaching retirement, as delays in remitting deductions could affect access to pension benefits despite regular deductions from their earnings over the years.

Nairobi County holds the biggest share of the arrears, having accumulated Sh41.28 billion in unpaid salaries and deductions. The figure represents more than 93 per cent of all payroll-related arrears reported across the 47 counties.

Murang’a follows with unpaid salary obligations amounting to Sh710.75 million, while Kisumu reported Sh618.7 million and Bungoma Sh593.8 million.

The latest findings have once again brought into focus long-standing concerns over financial management within county governments more than a decade after devolution was introduced.

For years, oversight bodies have flagged rising pending bills as a sign of weaknesses in how some counties manage public resources. The growing salary-related arrears now add to concerns over the ability of counties to meet their obligations to employees.

County administrations have repeatedly linked the delays to late release of funds from the National Treasury, arguing that irregular cash flows have affected their ability to pay salaries, remit deductions and settle other outstanding commitments.

Governors have also cited increasing expenditure on wages and growing demands for public services, saying county budgets are under pressure from expanding responsibilities and limited resources.

On its part, the National Treasury has maintained that counties must improve revenue collection and tighten spending in order to strengthen their financial position and reduce dependence on national government allocations.

The Auditor-General has in previous audit reports warned that failure to settle pending obligations can lead to court cases, penalties and additional costs that place a heavier burden on public finances.

The report notes that payroll arrears have a direct effect on workers because deductions continue to be made from their salaries even when the money is not forwarded to the relevant institutions.

Financial analysts have argued that clearing older debts should be prioritised, saying it would help reduce exposure to legal claims while rebuilding trust among employees and other creditors waiting to be paid.

They warn that continued delays in settling historical salary obligations could weaken confidence in county governments and negatively affect workers who depend on timely pay and remittance of deductions.

The findings come as county governments continue to face increasing financial commitments in sectors such as healthcare, agriculture, roads and other devolved services.

With personnel costs remaining one of the largest expenditure items in county budgets, many devolved units are left with limited resources for development projects.

Even as counties continue to attribute payroll challenges to delayed transfers from the National Treasury, the Treasury insists that stronger financial discipline and increased locally generated revenue remain key to improving the fiscal health of devolved governments.