At least 7,600 government workers in Kakamega have been blacklisted by banks and insurance firms after defaulting on loans and insurance payments in the past three months. The county government has accrued a debt of Sh1.06 billion between February and April due to its failure to remit deducted monies from employees’ salaries to banks, insurance companies, and state agencies.
The treasury is responsible for deducting these amounts from salaries and remitting them to entities like NHIF, NSSF, KRA, pension funds, banks, and insurance firms. A nurse at Matunda Health Centre reported having to pay cash for a hospital bill because her NHIF subscription was not compliant, revealing that the government had not remitted the subscriptions for three months. Another worker shared that his loan application was rejected due to CRB listing, despite his payslip showing loan deductions that were never remitted to the bank.
Senator Dr. Boni Khalwale recently convened a meeting with contractors and suppliers of the Kakamega government to assess the extent of pending bills. During the meeting, Madison Insurance presented documents indicating they are owed Sh15 million in loans and premiums, while Midland Emporium, not listed as a creditor, are owed Sh250 million.
County Secretary Lawrence Omuhaka explained that the county has been paying net salaries instead of gross due to delays in funds release by the exchequer.
He stated, “We’ve been taking bank overdrafts to pay salaries, with our monthly gross wage bill at Sh600 million but securing an overdraft for net pay of Sh250 million, which attracts 17 percent annual interest (1.06 percent per month).”
Omuhaka noted that Sh350 million should be deducted monthly from workers’ salaries for remittance to NHIF, NSSF, KRA, pension funds, insurance firms, and banks, which was not done. The county treasury is now on notice to remit the Pay As You Earn (PAYE) for February, March, and April to the Kenya Revenue Authority (KRA). NHIF has rendered county employees’ cards non-compliant, though Omuhaka claims NHIF owes the county Sh300 million for services rendered over the past year.
