Kakamega staff in the red over unremitted payment

Wednesday, May 15th, 2024 08:00 | By
Kakamega county assembly. PHOTO/Print

At least 7,600 Kakamega government workers have been blacklisted by banks and insurance firms after collectively defaulting on loans and insurance subscription payments in the past three months.

The county government owes banks, insurance companies and State agencies Sh1.06 billion which was accrued between February and April due to a failure to remit monies deducted from employees’ salaries.

The treasury is mandated as per contracts with the institutions to deduct the monies through check off from salaries and remit it to entities that include NHIF, NSSF, KRA, pension funds, banks and insurance firms.

A nurse at Matunda health centre claimed she was forced to pay cash for a hospital bill because her NHIF was not compliant, she said, “I learnt that the government did not remit the subscriptions for three months.”

Another worker related how his loan application feel through because of CRB listing. He noted that though his payslip reflects a check off deduction of a loan taken earlier, no cent had been remitted to the bank.

Pending bills

Two weeks ago, Senator Dr Boni Khalwale convened a meeting of contractors and suppliers of the Kakamega government   to explore the extent of pending bills, after a list tabled by governor Fernandes Barasa was adjudged as inconclusive.

In the meeting, Madison Insurance tabled documents suggesting that they are owed Sh15 million in loans and premium, while Midland Emporium, though not listed as a creditor, are owed Sh250 million.

Bank overdrafts

Reached for comment, the county secretary Lawrence Omuhaka said the county has been paying a net of the salary as opposed to the gross.

He explained, “We’ve been going for bank overdrafts to pay salaries because of delays by the exchequer to release funds. Our monthly wage bill is Sh600 million (gross) but we go for an overdraft of a net pay, which is Sh250 million. This attracts an annual interest of 17 per cent (1.06 per cent) per month,”

He went on, “Every month, a collective sum of Sh350 million should be deducted from workers’ salaries to be remitted to NHIF, NSSF,  KRA, pension funds , insurance firms and banks.  We did not remit”

The county treasury is currently on notice to remit to Kenya Revenue Authority (KRA) the Pay As You Earn (PAYE) for February, March and April.

National Hospital Insurance Fund (NHIF)) has rendered the county employee’s cards non-compliant. But Omuhaka claims NHIF has not paid the county Sh300 million for services rendered to her clients over the past year.

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