Cabinet Orders DCI Probe Into Suspected KSh6.2 Billion Government Payroll Fraud

Cabinet Orders DCI Probe Into Suspected KSh6.2 Billion Government Payroll Fraud

The Cabinet has directed the Directorate of Criminal Investigations (DCI) to launch an immediate investigation into suspected payroll fraud worth KSh6.2 billion across government institutions, following an audit that uncovered widespread irregularities in public sector salary management.

The directive was issued during a Cabinet meeting chaired by President William Ruto at State House, Nairobi, on Tuesday, June 30, as the government intensified efforts to curb corruption, protect public funds and restore confidence in the management of the national wage bill.

According to a Cabinet dispatch released after the meeting, investigators have been tasked with uncovering the full extent of alleged payroll manipulation within Ministries, Departments, Agencies (MDAs) and State Corporations.

Authorities believe the suspected fraud involves unauthorised alterations to payroll records, irregular salary payments, weak internal controls and failures in the management of statutory deductions, resulting in significant financial losses to taxpayers.

“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 Cabinet dispatch stated.

The government says the investigation will focus on identifying individuals and organised networks allegedly exploiting weaknesses within public payroll systems for personal gain.

As part of the probe, detectives have been instructed to verify employee personal numbers used during payroll processing, trace irregular transactions, recover any funds obtained fraudulently and recommend criminal charges against anyone found responsible.

The Cabinet’s intervention follows a comprehensive payroll audit that revealed suspected financial irregularities in 12 out of Kenya’s 53 State Departments.

According to the audit findings, the sampled departments recorded suspected payroll anomalies amounting to approximately KSh6.2 billion, exposing significant weaknesses in payroll administration and oversight.

“A sample audit of 12 of the 53 State Departments revealed suspected payroll irregularities amounting to KSh6.2 billion, exposing unauthorised alterations to payroll records, irregular payments, weak controls over statutory deductions, fragmented payroll management and major oversight gaps,” the dispatch added.

The findings have raised fresh concerns about the integrity of Kenya’s public payroll system, which accounts for one of the largest components of government expenditure each financial year.

Beyond criminal investigations, Cabinet has approved a series of reforms aimed at strengthening payroll management and preventing future losses.

Among the key measures is a nationwide audit covering all remaining State Departments, Ministries, Agencies and public institutions to determine the full extent of payroll-related irregularities across government.

Officials say the broader audit will help identify ghost workers, duplicate records, unauthorised salary adjustments and other fraudulent practices that may have escaped earlier reviews.

The government has also directed all Ministries, Departments, Agencies and State Corporations to migrate to the newly upgraded Integrated Human Resource and Payroll System (IHRPS).

According to the Cabinet, the centralised digital platform is expected to standardise payroll management, improve transparency and strengthen oversight through automated monitoring and enhanced accountability mechanisms.

The reforms form part of the government’s wider public sector transformation agenda aimed at improving financial discipline while ensuring public resources are used efficiently.

Payroll fraud has remained one of the longstanding challenges facing Kenya’s public service, with previous audits repeatedly uncovering ghost workers, duplicate salary payments, irregular allowances and weaknesses in internal financial controls.

Successive administrations have introduced payroll verification exercises and digitisation programmes in an effort to eliminate fraudulent payments, although concerns have persisted over gaps in implementation.

The latest Cabinet directive signals a renewed crackdown on financial misconduct within government, with authorities indicating that investigations will extend beyond identifying administrative failures to holding individual officers criminally accountable where evidence supports prosecution.

As the DCI begins its investigations, attention is expected to shift to the affected government departments and agencies, with the findings likely to shape further reforms aimed at protecting billions of shillings in public funds and restoring confidence in Kenya’s payroll management systems.

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Cabinet Orders DCI Probe Into Suspected KSh6.2 Billion Government Payroll Fraud