Cabinet Directs DCI to Hunt Payroll Fraud Syndicates After Ksh 6.2 Billion Audit Shock

The Cabinet has directed a major crackdown on payroll fraud across government after an audit flagged suspected irregularities worth Ksh. 6.2 billion in 12 state departments.

The decision came during a Cabinet meeting chaired by President William Ruto at State House in Nairobi on Tuesday.

In a Cabinet dispatch, the government said the reforms aim to dismantle “deeply entrenched and decades-long payroll fraud,” restore integrity to the public wage bill, and protect taxpayers’ money through a whole-of-government payroll overhaul.

A comprehensive payroll audit also uncovered weaknesses in payroll governance. The review sampled 12 of the 53 State Departments and identified suspected payroll irregularities totaling Ksh. 6.2 billion. The irregularities included unauthorised changes to payroll records, irregular payments, weak controls over statutory deductions, fragmented payroll management, and major oversight gaps.

“Consequently, Cabinet directed the Directorate of Criminal Investigations to investigate payroll fraud, verify personal numbers used in payroll processing, dismantle criminal networks manipulating Government payroll systems, recover lost public funds, and ensure the immediate arrest and prosecution of all persons found culpable,” the dispatch said.

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“The meeting also ordered the immediate implementation of a comprehensive payroll reform programme, including a Governmentwide audit of all remaining State Departments and public institutions, mandatory migration of all Ministries, Departments, Agencies and State Corporations onto the newly revamped Integrated Human Resource and Payroll System, enhanced cybersecurity, payroll data cleansing and validation, establishment of a disaster recovery site, and integration of payroll with other public financial management systems.”

In another cost-cutting move, the Cabinet froze the leasing or hiring of additional office space as it ordered an audit of how government offices are used. It also directed the development of a programme to renovate public offices and improve service delivery.

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