Nairobi — The government has abolished security allowance and quarter per diem paid to Civil Servants as part of the measures aimed at reducing its wage bill.
At the same time, the government has embarked on a crackdown on thousands of civil servants who have continued to enjoy certain allowances long after they ceased to be entitled to them.
The order stopping the allowances and detailing the crackdown is contained in a confidential circular signed by Public Service head Francis Muthaura.
The abolition of allowances will come as a shock to civil servants who rely on them to embellish their meagre pay. Hardest hit will be those on duty outside their stations for they will no longer be paid per diem to cater for their incidental expenses.
Per diem is paid as a residual allowance to assist officers traveling on duty or on courses to meet incidental expenses where all traveling, boarding and lodging expenses have been met in full or where subsistence allowance has been paid.
The new policy, which is one of the desperate attempts by the government to manage its recurrent budget, becomes effective July 1.
Muthaura, on June 18 ,wrote a confidential circular to permanent secretaries, the Attorney General, Public Service Commission Secretary and the Comptroller of State House breaking the sad news for public servants. The circular which was received at the Principal Administrative Secretary on June 23, also broke the news that the government was cracking down on thousands of civil servants who may have continued to enjoy such allowances as hardship, rental, commuted mileage and transfer long after their entitlement ceased.
Other allowances targeted for streamlining in their management include acting, entertainment, uniform, extraneous and general expenditures on training allowances.
Scrapped security allowance has been paid to clerical officers deployed to work in secret registries in accordance with Regulation J7 of the Code of Regulations.
In his Budget speech, Finance minister, David Mwiraria lamented that the cost of travel and accommodation has been rising, adding that controls were now necessary.
He said beginning the next fiscal year, journeys outside office will be curtailed and where externally funded, no supplementary allowance will be given by the government.
"This restriction applies to all levels of government officers including those in public enterprises. For these reasons, provisions for this item have been adjusted downwards to the bare minimum," said Mwiraria.
As anticipated, Muthaura's circular has already triggered panic among all the cadres of the Public Service because of a perception that it now opens a door through which the government will cut down the number of civil servants.
The fear is compounded by the fact that few civil servants have taken the government offer for early retirement because of the feeling that the so-called "golden handshake" package is too little.
"It has been observed that expenditure on several remunerative allowances continue to escalate, while many officers to whom they do not apply are reflected as recipients," says the circular.
Muthaura is his circular is directs accounting officers to take personal interest in the control of and management of the allowances to stamp out wastage.
"Those suspected to have colluded to defraud the government through irregular payments and or receipt of the same should be appropriately dealt with," Muthaura warns.
He says some officers have continued drawing higher housing allowance without authority, even after being transferred from regions with higher allowances to those with lower rates.
He says there are also those who receive both rental and owner-occupier house allowances simultaneously contrary to official government policy.
Muthaura warns that although the cited irregularities may not be exhaustive, "prudence and diligence must be exercised by all leaders in order to eradicate irregular payment of allowances, thus arresting the escalating public service wage bill".
Muthaura says the government has in the past one decade carried out reforms in the Civil Service focusing, among other measures, harmonisation of the pay and benefits and putting in place interventions to enhance efficiency.
"Despite these reforms, the Civil Service wage bill has remained high in relation to the gross domestic product (GDP) while the average pay for individual servants has remained low. This has resulted in low productivity and low level of service delivery," he says.
Muthaura believes that these cost containment measures will attract and retain skilled personnel, improve remuneration in the Civil Service and ultimately enhance service delivery.
The recurrent budget for the ending financial year was estimated at Sh333.9 billion, including the Sh22.9 billion financed through appropriations-in-aid and payments financed directly from the Consolidated Fund Services amounting to Sh130.2 billion.
According to the government sources, the estimates left Sh180.8 billion for discretionary expenditures.
The gross development expenditures for the 2003/4 fiscal year were estimated at Sh54.9 billion, including Sh13.7 billion as project grants and Sh8.4 billion as project loans.