By E, KNA
The Salaries and Remuneration Commission (SRC) is calling on public universities to comply with a new wage expenditure limit that caps spending on the item at 35 percent of their total revenue.
The commission indicated that an inordinately high number of institutions of higher learning in the country do not meet the wage-bill-to-revenue ratio threshold of not more than 35 per cent prescribed in the Public Finance Management Act of 2012 and anchored in the Public Finance Management Regulations (PFM) of 2015.
SRC’s role is to set, review and advise universities, county governments and other public sector entities on equitable, competitive and fiscally sustainable remuneration in the public sector.
Commissioner Abdiwahab Abdullahi Abdi indicated that compliance with the wage bill threshold was essential for institutional stability and long-term financial health in all public universities and other public sectors. “Compliance on the wage bill limit will yield sustainable economic development, improve public service delivery and build public trust,” he added.
Speaking at Egerton University’s Njoro Main Campus where the institution’s senior management team and staff were taken through a stakeholder engagement on the role and mandate of the Salaries and Remuneration Commission, Commissioner Abdi said the commission was guiding different public sectors on specific wage bill ratios to balance efficiency, productivity and fiscal responsibility.
Abdi who was accompanied by the Commission’s Legal Officer James Sietenei and Wesley Rono attached to its Performance and Remuneration Monitoring and Evaluation Department (PORME) underscored the expanding role of SRC in strengthening institutional governance, improving wage management, and ensuring transparency and accountability across all public universities.
He explained that SRC was seeking to strengthen dialogue with institutions to identify salient issues, pain points, and systemic challenges that impact sustainability and human resource productivity.
“It is important to make reference to the recent BOMAS resolutions of the Salaries and Remuneration Commission, where universities were directed to enhance accuracy and verification of staff academic credentials,” the Commissioner advised.
Commissioner Abdi further pointed out that public institutions are expected to capture and authenticate staff data comprehensively to curb cases of unverifiable qualifications and improve integrity in the higher education sector.
Over 40 public universities have been flagged by the Auditor General for spending more than Sh62 billion on staff salaries in the 2023/2024 financial year, raising concerns over financial discipline and compliance with fiscal regulations.
According to the report, the institutions used 62 per cent of their total Sh100 billion revenue on personnel emoluments, leaving little for development and operations.
Auditor General Nancy Gathungu, in her report for the financial year 2023/2024, expressed concern that the current liabilities reported by public universities have been steadily increasing over the years.
According to SRC, some public institutions require a larger workforce, leading to higher wage bill ratios that exceed the prescribed limit.
A resolution from the third National Wage Bill Conference held in September last year, agreed that state institutions refine their financial strategies to achieve the 35 per cent wage bill-to-revenue target by June 2028. The figure stood at 43.54 per cent in the financial year ending June 2023.
Empirical evidence, according to a report compiled by SRC indicates that while commercial state agencies generally operate within lower wage bill ratios, public service institutions—particularly universities—often exceed 50 per cent.
Counties are also facing similar financial challenges. The commission pointed out that once counties establish their infrastructure, their primary expenditure shifts to operational costs, with salaries being the biggest component.
Universities, counties, and other public bodies have since raised concerns over their ability to meet the 35 per cent wage bill cap.
Egerton University Vice Chancellor Professor Isaac Kibwage conceded that the 86-year-old institution’s financial condition had left it struggling to manage its wage bill of more than Sh180 million and added that they still owe staff deferred pay, which continues to reflect on pay slips.
Professor Kibwage expressed concern that if the appropriated funds to universities are not disbursed on time, salary payments may become strained. However, he reassured the Commission that despite the difficulties, the University is committed to stability and resilience.
“Despite the challenges public universities are facing, this our country and we have to make it stable. We must make difficult decisions to make our public institutions to continue operating,” he stated.
He noted that Egerton University staff numbers had reduced significantly from 1,905 to the current 1,270, partly due to restructuring and outsourcing of services such as security and cleaning.
“The University currently has almost 900 academic staff and about 500 administrative staff, though growing student numbers may necessitate strengthening staffing levels,” added Professor Kibwage.
The report by the Auditor General disclosed that institutions were consistently failing to meet their short-term obligations, including trade payables, statutory deductions and other operational expenses.
Personnel emoluments include all forms of financial compensation and benefit an employee receives for their work, such as wages, salaries, bonuses, commissions and allowances like travel, sick pay, or leave pay.
Among universities with the highest wage bills are the University of Nairobi (Sh8.6 billion), Kenyatta University (Sh6.6 billion), Jomo Kenyatta University of Agriculture and Technology (Sh5.1 billion), Moi University (Sh4.5 billion) and the Technical University of Kenya (Sh3.9 billion).
Others are Egerton University (Sh2.8 billion), Maseno University (Sh2.5 billion), Masinde Muliro University of Science and Technology (Sh2.4 billion), University of Eldoret (Sh2 billion), Technical University of Mombasa (Sh1.6 billion), Maasai Mara University (Sh1.3 billion), Dedan Kimathi University of Technology (Sh1.2 billion), University of Kabianga (Sh1.1 billion), Pwani University (Sh1 billion), Meru University of Science and Technology (Sh1 billion), Multimedia University of Kenya (Sh1 billion), Machakos University (Sh1 billion) and South Eastern Kenya University (Sh993.6 million).
The report, which is the most recent by the Auditor General, also highlights recurring weaknesses in legal compliance and institutional oversight, highlighting the need for stronger governance frameworks, enhanced accountability and adherence to statutory and regulatory obligations across public universities.
The identified issues include non-adherence to the one-third basic salary requirement, non-compliance with laws on staff ethnic composition, non-compliance with legal requirements on acting appointments and breaches of fiscal responsibility principles on wage bills.
Regarding fiscal responsibility, the report shows that 39 public universities recorded employee costs exceeding 35 per cent of their total revenue, contrary to the Public Finance Management (National Government) Regulations.
The Technical University of Kenya was found to have spent more on staff compensation than it earned, with its wage bill equivalent to 116 per cent of its total annual revenue. It was followed by Taita Taveta University at 87 per cent and Technical University of Mombasa at 83 per cent.
The report noted that these spending patterns violated fiscal responsibility principles and limited universities’ ability to invest in infrastructure, research, and other operational needs.
In addition, an audit of payroll records for the year ended June 30, 2024, revealed that 12 public universities breached the Employment Act, 2007, by paying more than 313 employees’ net salaries amounting to less than one-third of their basic pay.
The affected institutions include the University of Nairobi (31 staff), University of Kabianga (7), Masinde Muliro University of Science and Technology (4), Dedan Kimathi University of Technology (103), Jaramogi Oginga Odinga University of Science and Technology (100), Garissa University (25), Murang’a University of Technology (17), Kisii University (18), Laikipia University (7) and Maasai Mara University (1).
The Auditor General also flagged 19 universities for violating the National Cohesion and Integration Act, which requires that no more than one-third of staff in any public establishment should come from a single ethnic community.
