The Cabinet has directed the Directorate of Criminal Investigations (DCI) to launch comprehensive investigations into an alleged KSh6.2 billion payroll fraud uncovered across 12 government ministries, departments, and agencies (MDAs), in what is being described as one of the largest public sector payroll scandals in recent years.
The decision follows the discovery of widespread payroll irregularities that reportedly led to the loss of billions of shillings through payments to ghost workers, unauthorized salary adjustments, duplicate records, and other fraudulent practices within the affected State departments.
According to a Cabinet dispatch issued after a meeting chaired by President William Ruto, the government has instructed the DCI to work alongside relevant oversight institutions to identify those responsible for the fraudulent scheme and ensure they are held accountable under the law.
The Cabinet emphasized that the government remains committed to safeguarding public resources and strengthening accountability within the public service.
It noted that any public officers found to have participated in or facilitated the fraudulent payments would face criminal prosecution, disciplinary action, and recovery of any stolen funds.
The payroll fraud was reportedly uncovered during ongoing audits and reviews aimed at cleaning up the government payroll system and enhancing transparency in public financial management.
The exercise identified numerous irregular transactions that had escaped detection for extended periods, resulting in significant financial losses to taxpayers.
Government officials said the investigations will focus on determining how the fraudulent payments were processed, identifying weaknesses within payroll management systems, and recommending reforms to prevent similar incidents in the future.
The DCI is expected to collaborate with institutions including the Ethics and Anti-Corruption Commission (EACC), the Office of the Auditor-General, the National Treasury, and other relevant agencies during the investigations.
Authorities will also examine whether organized criminal networks involving both public servants and external actors played a role in facilitating the fraud.
The Cabinet reiterated that the government has intensified efforts to eliminate corruption and financial mismanagement across public institutions as part of broader reforms aimed at improving service delivery and restoring public confidence in government operations.
Experts have long warned that payroll fraud continues to pose a major challenge in Kenya's public sector, with ghost workers and irregular salary payments costing taxpayers billions of shillings over the years.
Such fraudulent schemes not only waste public resources but also undermine the government's ability to finance essential services, including healthcare, education, infrastructure, and social protection programs.
Analysts argue that strengthening digital payroll systems, conducting regular staff audits, integrating biometric employee verification, and enhancing internal controls are among the measures needed to curb payroll-related fraud.
They also emphasize the importance of enforcing strict accountability measures against individuals involved in financial misconduct.
The latest investigations are expected to include a comprehensive review of employee records within the affected State departments to establish the actual number of legitimate public servants on government payrolls.
Authorities are also expected to scrutinize payroll approvals, recruitment records, promotions, and salary adjustments that may have been manipulated to facilitate the alleged fraud.
The Cabinet further directed ministries and State agencies to fully cooperate with investigators by providing all requested documentation and information.
It warned that any attempts to obstruct investigations or destroy evidence would attract severe legal consequences.
The government has in recent years undertaken several reforms aimed at improving public financial management through digitization, integrated payroll systems, and enhanced audit mechanisms. However, repeated cases of financial irregularities continue to expose vulnerabilities within some public institutions.
The KSh6.2 billion payroll scandal is likely to intensify calls for stricter oversight of government expenditure and stronger enforcement of anti-corruption laws.
Members of the public and civil society organizations have consistently urged authorities to ensure that individuals implicated in corruption cases face prosecution and that stolen public funds are recovered.
As investigations commence, attention will focus on the DCI's ability to unravel the network behind the alleged payroll fraud and bring those responsible to justice.
The outcome of the probe is expected to shape future reforms in payroll management while reinforcing the government's commitment to transparency, accountability, and prudent use of public resources.