NAIROBI, Kenya- The Cabinet has ordered a criminal investigation into a suspected Sh6.2 billion payroll fraud after a special audit uncovered widespread irregularities in the government’s payroll system, including unauthorised payments, ghost payroll transactions and massive alterations to employee records.
The directive follows an audit of 12 out of 53 government entities, which revealed significant financial losses linked to weaknesses in the Human Resource Information System-Kenya (HRIS-K).
The Cabinet directed the Directorate of Criminal Investigations (DCI) to pursue those responsible as part of a broader crackdown on payroll fraud.
According to the audit, payroll administrators made unauthorised changes to employee records, while weaknesses in system controls allowed irregular salary payments and other suspicious transactions to go undetected.
The findings also raised concerns over possible ghost workers and failures in payroll governance.
The review found that 720 system editors altered more than 4.7 million payroll records without audit trails, with some officers reportedly editing their own records.
Investigators also flagged weak cybersecurity controls, expired ICT licences and poor integration between government payroll systems, exposing public funds to fraud.
The Cabinet approved a raft of reforms aimed at sealing loopholes in the payroll system, including mandatory cybersecurity certification for all HRIS-K users, deployment of forensic analytics to support criminal investigations, a governance overhaul of the payroll platform and full integration of statutory deductions across public institutions.
The reforms build on an interim payroll audit released earlier this month, which estimated that taxpayers could be losing nearly Sh6 billion through ghost workers, irregular salary payments and payroll anomalies.
The audit identified missing identity records, invalid Kenya Revenue Authority PINs, duplicate identification numbers and employees sharing bank accounts, all of which heightened the risk of fraud.
The government says the reforms are intended to strengthen accountability, improve payroll integrity and safeguard public resources as it intensifies efforts to eliminate fraud within the public service.