Ghost workers face purge in parastatal payroll clean up

The quest to remove ghost workers from government payroll and trim the public wage bill has moved to parastatals and agencies, Treasury secretary Henry Rotich has said.

Mr Rotich told Parliament last week that biometric registration would ensure that all employees in the payroll are accounted for and save the State millions of shillings lost annually to ghost workers.

“The exercise will be extended to all government agencies with the aim of putting to rest the issue of ghost workers in the public service and ensure efficient management of the wage bill,” Mr Rotich said in the Budget Review and Outlook Paper, 2015.

“This will entrench efficiency and effectiveness in public service and ensure that all public servants can be accounted for.”

The minister’s pronouncement came 12 months after more than 12,500 civil servants were struck off the payroll for failing to show up during a two-month registration exercise that was aimed at weeding out ghost workers.

The government is struggling to contain a ballooning wage bill with parastatals, whose salaries have been rising faster than the public sector average, as a key part of the initiative.

Parastatal wages rose 46.5 per cent in the past five years to Sh126 billion compared to national government’s increase of 32 per cent.

Per capita pay for workers in parastatals has been rising faster and employees are generally paid better than the wider public sector or private sector.

The audit involves fresh capture of the biometric details like fingerprints and verifying of academic documents of all the workers who have to be physically present.

The exercise will target nearly 200 government-owned entities, including regulatory agencies, public universities, research institutions and State corporations.

Official data indicates that parastatals and corporations majority-controlled by the government had 138,500 employees by the end of last year.

Last year’s audit targeting civil servants and county employees helped the government save Sh7.2 billion in salaries and allowances, and the Treasury will be keen to make further cuts to the national wage bill.

The national government wage bill accounted for 33.3 per cent of State revenues in the year ended June.

The ratio is forecast to fall 30.2 per cent in the year to next June and 25.6 per cent by mid-2019 on rising revenues and employment of fewer people.

The State spent Sh568 billion in the year ended June 2015 to pay its workers. The wage bill represents 10 per cent of the gross domestic product (GDP), well above the middle-income country average of about five per cent.

A higher wage bill has condemned the Treasury to channel less than 30 per cent of the national budget towards development expenditure, in violation of the Public Finance Management Act.

A majority of the government agencies targeted by this audit depend on the Treasury to fund their expenditures and any ghost workers are an extra expense on taxpayers.

A report on the reform of parastatals, which was released in 2013, showed that only 51 per cent of the 188 government agencies do not receive budgetary support.

“With regard to wage bill, 96 State corporations would require Treasury support as it cannot be covered by internally generated funds,” the report said.

The report added that the government contribution to salaries among the State agencies is about six per cent of recurrent expenditure.

During the audits, workers are required to present themselves with their original identity cards, letters of first appointment, letters of appointment to the current grade, original academic and professional certificates, duly completed biometric data forms, current pay slips, and birth certificates.

Opposed to headcount

In addition to the documents, the registration captures each public servant’s signature, fingerprints and photograph.

But workers unions were opposed to last year’s headcount, with the Central Organisation of Trade Unions (Cotu) saying that the process would end in the sacking of employees through the back door. It is suspected that officers in the human resources departments as well as those manning payrolls add the false names to siphon the extra salaries.

This includes substituting names of dead or retired employees with those of their cronies, who receive the money.

They take aantage of the outdated IT system that has not kept pace with developments in modern finance management to ensure theft of public money goes undetected.

Besides the removal of ghost workers from the payroll, the government is considering laying off workers to further trim the wage bill.

Thousands of civil servants could lose their jobs in the next three months if the Jubilee government keeps a promise it made to the International Monetary Fund (IMF) in July.