Download - County Costs Analysis Details_John Kinuthia
How Much Does it Cost to Run My
County Government?
John Kinuthia
Research Analyst30/09/2015
What we did…
• Estimated the costs of core personnel and
administration required to run a county.
• Core personnel is mostly senior staff, state officers
from both the executive and the assembly
• Administration includes support staff as well as
insurance costs at both levels of government.
• Operation and maintenance costs are calculated as
a percentage of total wage costs excluding
insurance
• We also calculated car loans and mortgage costs for
CECs and MCAs only.
www.Internationalbudget.org/kenya 2
Which data we used…
• SRC circulars issued between March 2013 and
December 2014.
• Reports and circulars from the Commission on
Revenue Allocation.
• Division of Revenue Bills and Acts 2013/14
and 2014/15
www.Internationalbudget.org/kenya 3
www.Internationalbudget.org/kenya 4
Core Personnel
County Executive
Governors
Deputy Governors
CEC Members
County Secretaries
Chief Officers
County Assembly
Speaker
Deputy Speaker
Leader of Majority
Deputy Majority Leader
Chief Whip
Deputy Chief Whip
Leader of Minority
Minority Whip
Chairpersons (excl the Speaker)
V/chairpersons
Speakers Panel
All other MCAs
Calculating the number of Assembly Committees
• The County Assembly Forum website had
committee data for all 47 counties but only 38
were complete.
• The actual number of committees fluctuated
between 15-26.
• We took an average of the 38 complete sets=
20 committees per assembly
• We used this average for all counties, rather
than actual numbers to avoid incentivizing
counties to have more committees
www.Internationalbudget.org/kenya 5
What is the cost difference based on the number
of Assembly Committee Numbers?
• The total running costs for counties based on
an average number of committees is Ksh 48.5
billion
• Using the actual number of committees the
total costs was slightly lower at Ksh 48.4
billion.
• However, the differences at individual county
level were more varied.
www.Internationalbudget.org/kenya 6
www.Internationalbudget.org/kenya 7
County
Average Committee
Number
Actual Committee
Numbers Difference
% Change in Total
County Costs
1 MAKUENI 20 25 10,218,000 1.0%
2 KILIFI 20 23 8,133,840 0.7%
3 MOMBASA 20 24 7,506,720 0.7%
4 UASIN GISHU 20 24 7,122,960 0.7%
5 GARISSA 20 23 7,104,240 0.7%
COUNTY AVERAGE 20 20 592,734 0.1%
5 WAJIR 20 17 8,133,840- -0.8%
4 VIHIGA 20 16 8,505,120- -0.9%
3 KAKAMEGA 20 16 (10,845,120) -0.8%
2 NAKURU 20 16 (10,845,120) -0.8%
1 TURKANA 20 15 (13,556,400) -1.3%
www.Internationalbudget.org/kenya 8
Adminstration
County Executive
Chief of Staff
Chair County Public Service Boards
Vice Chair County Public Service Boards
Member County Public Service Boards
Secretary County Public Service Board
County Treasury
Sub-County Administrators
Ward Administrators
Support Staff Governors Office-:of which
Cooks
Tea Person
Gardener
Advisors
County Assembly
County Assembly Staff
County Assembly Ward Staff
County Assembly Service Board
Core Personnel
• The total cost for core personnel in the
counties is Ksh 22.7 billion.
• The County executive makes up Ksh 6.6 billion
of this while the assembly estimated costs are
Ksh 16.1 billion.
• Ksh 6.7 billion of this are costs for operations
and maintenance.
www.Internationalbudget.org/kenya 9
www.Internationalbudget.org/kenya 10
County Core Personnel
Estimated Cost
(Billions)
Core County Executive Personnel 4.7
Estimated O&M for County Executive Core Personnel 1.9
Total County Executive Core Personnel Cost 6.6
Core County Assembly Personnel 11.2
Estimated O&M for County Assembly Core Personnel 4.8
Total Core County Assembly Personnel Cost 16.1
Total for County Core Personnel 22.7
County Administration
• The total administration costs came to Ksh
23.1 billion.
• The executive is the big driver of this cost
accounting for Ksh 14 billion while the county
assemblies cost came to Ksh 9.1 billion
• Operations and maintenance costs were Ksh
5.3 billion of the total.
www.Internationalbudget.org/kenya 11
www.Internationalbudget.org/kenya 12
County Administration
Estimated Cost
(Billions)
Executive Administrative Personnel 10.8
Estimated O&M for County Executive Administration 3.2
Total County Executive Administration Cost 14.0
County Assembly Administrative Personnel 7.0
Estimated O&M for County Assembly Administration 2.1
Total County Assembly Administration Cost 9.1
Total County Administration Cost 23.1
Bringing it all together
• Our total estimates for county running costs
was Ksh 48.5 billion
• The Assemblies make up Ksh 27.4 billion and
the Executive estimates are Ksh 21.1 billion
www.Internationalbudget.org/kenya 13
www.Internationalbudget.org/kenya 14
Car Loans and Mortgages
• SRC released 2 circulars (in 2013 and mid-2014) for
car and mortgage benefits for MCAs and CECs
respectively.
• The circulars suggested that these benefits would be
provided through the budget as cash-backed funds
(i.e., the full value of the loan would be set aside by
the government).
• Our total estimated cost for the two sets of officials is
Ksh 13.4 billion, which we spread across five years
(Ksh 2.7B annually).
www.Internationalbudget.org/kenya 15
www.Internationalbudget.org/kenya 16
County Expenditure Items Estimated Cost
Core County Personnel 22,696,579,009
County Administration 23,096,116,270
Car Loan and Mortgage 2,680,000,000
Total Estimated Costs 48,472,695,279
Total Estimated Costs as a % of Equitable Share 19%
Total Estimated Costs as a % of Kenya's Total Budget 2%
• The average cost of running a county is Ksh 1.03
billion
• At individual county levels, Nairobi has the highest
cost of Ksh 1.8 billion.
• Lamu and Isiolo Counties have the lowest costs at
Ksh 695 million each.
• Nairobi’s costs were two and a half times higher than
Lamu/Isiolo
www.Internationalbudget.org/kenya 17
www.Internationalbudget.org/kenya 18
Implications for the Basic Equal Share
• One way to think about this is by using the lowest cost
county as the base.
• Multiply base by a factor of 47.
• In this case, Ksh 695 million multiplied by 47 comes to
Ksh 32.7 billion.
• This is 13 percent of the total equitable share (Ksh 260
billion) in 2015/16.
• Each county should get this as the equal share and the
rest of their running costs should be determined by other
factors such as assembly sizes, population land area etc.
www.Internationalbudget.org/kenya 19
Expanded Car Loans and Mortgages Benefits
• In Dec 2014, SRC issued a new circular expanding
this benefits to all state officers and public officers.
• The benefit is stated as a 3% loan for 5 years for car
purchase, and a 3% loan for 20 years for a home
mortgage
• This increased the benefits going forward for MCAs
and CECs as well.
• Did not include in our estimates due to the very high
potential costs associated with this; not necessarily
to be implemented all at once
www.Internationalbudget.org/kenya 20
www.Internationalbudget.org/kenya 21
Job Title Job Group Car Loan Mortgage
Executive
Governors V 10,000,000 40,000,000
Deputy Governors U 5,000,000 25,000,000
CEC Members S 4,000,000 20,000,000
County Secretaries S 4,000,000 20,000,000
Chief Officers S 4,000,000 20,000,000
Chief of Staff S 4,000,000 20,000,000
Chair County Public Service Boards S 4,000,000 20,000,000
Vice Chair County Public Service Boards R 3,000,000 15,000,000
Member County Public Service Boards R 3,000,000 15,000,000
Secretary County Public Service Board R 3,000,000 15,000,000
Advisors R 3,000,000 15,000,000
Sub-County Administrators P,Q 3,000,000 15,000,000
Ward Administrators L,M 1,500,000 10,000,000
Support Staff Governors Office-:of which
Cooks A-F 600,000 4,000,000
Tea Person A-F 600,000 4,000,000
Gardener A-F 600,000 4,000,000
County Assembly
Speaker S 4,000,000 20,000,000
County Assembly Clerk S 4,000,000 20,000,000
Members of the County Assembly P 3,000,000 15,000,000
County Assembly Staff K-N* 1,500,000 10,000,000
County Assembly Ward Staff A-F 600,000 4,000,000
*This was taken as the median job group because the staff were not broken down by job groups
How much does this cost?
Depends whether it is a cash-backed fund like
the original benefit or not. If cash-backed:
• The cost for the scheme for all staff excluding the
CECs and MCAs is Ksh 120 billion
• When we add the CECs and MCAs cost based on their
old benefits the cost rises to Ksh 133 billion
• Taking into account CECs and MCAs with their new
benefits the costs shoots up to Ksh 171 billion
www.Internationalbudget.org/kenya 22
Car Loans and Mortgages Continued
• The December circular does not say that the fund is
cash backed; it does say that the scheme shall be
managed “internally”
• It is possible to pay an interest rate subsidy instead of
creating a cash-backed fund
• Benefit requires loans at an interest rate of 3% while
market lending rates stand at 16%.
• Counties could pay the 13 percentage point difference
on bank loans
• Lower upfront costs than cash-backed fund, but costs
spread over many years and no return to government
www.Internationalbudget.org/kenya 23
Car Loans and Mortgages
• We calculated the cost of this subsidy of 13%
on a reducing balance basis.
• The total costs comes to Ksh 6.5 billion for car
loans over 5 years and Ksh 207 billion for
mortgages over a period of 20 years.
• That is Ksh 1.3 billion per year for car loans
and Ksh 10.3 billion per year for mortgages.
• This does not include the cost of providing the
benefit to county service workers (health, etc.)
www.Internationalbudget.org/kenya 24
Information and Guidance Gaps
Items where more information is needed
1) SRC and others should provide clear costings for all
benefits to be provided
2) The basis for costing of group insurance should be clear,
and some estimates for real property insurance should
also be derived.
3) The basis for operations and maintenance cost estimates
needs to be clarified
4) The basis for costing of extra mileage for Members of
County Assemblies needs to be clarified and a
centralized database of distances created
www.Internationalbudget.org/kenya 25
Areas where guidelines might be required
1) What is the number of committees that each county
assembly should have?
2) What type of staff should be brought on board to
support the running of county assemblies and county
executives? What is the right balance between
administrative and technical staff?
3) Which staff hired by counties should be treated as
permanent and which should be treated as contract or
casual? (To properly establish gratuity costs)
www.Internationalbudget.org/kenya 26
Thank You
www.Internationalbudget.org/kenya 27