The Cabinet has directed the Directorate of Criminal Investigations (DCI) to launch a full-scale probe into suspected payroll fraud amounting to Ksh.6.2 billion, after an audit exposed widespread irregularities across multiple State departments.
The directive was issued during a Cabinet meeting chaired by President William Ruto at State House, Nairobi, on Tuesday. The session followed a comprehensive payroll audit that revealed serious weaknesses in how government wages are managed and disbursed.
A sample review of 12 out of the country’s 53 State departments uncovered the suspected irregularities, which included unauthorised alterations to payroll records, irregular payments, weak controls over statutory deductions, and fragmented payroll management systems.
According to a Cabinet dispatch, the reforms are meant to dismantle what it described as fraud that has been deeply entrenched in government payroll systems for decades. The DCI has been tasked with verifying personal numbers used in payroll processing, dismantling criminal networks manipulating the system, recovering lost public funds, and ensuring that all culpable persons are arrested and prosecuted.
To prevent further losses, Cabinet approved a government-wide payroll reform programme. This includes an audit of all remaining State departments and public institutions, mandatory migration of all Ministries, Departments, Agencies and State Corporations onto the revamped Integrated Human Resource and Payroll System, enhanced cybersecurity, and the establishment of a disaster recovery site.
In a related cost-saving move, Cabinet froze the leasing or hiring of additional government office space pending an audit of how existing offices are being utilised. A programme to renovate public offices and improve service delivery is also underway.
The Cabinet further established a Standing Committee on Artificial Intelligence to guide the country’s national AI strategy, alongside adopting a National Business Process Outsourcing Policy aimed at creating jobs for young people and attracting global investment.
With forecasts pointing to moderate-to-strong El Niño rains later this year, an Ad Hoc Cabinet Committee on El Niño Preparedness and Response was also formed, chaired by Deputy President Prof. Kithure Kindiki, to oversee flood mitigation and emergency response plans.
Cabinet also approved the Ksh.26 billion Judicial Performance Improvement Project Phase II, in partnership with the World Bank, and an additional Ksh.16.6 billion to complete the Mwache Multipurpose Dam in Kwale County, which is expected to supply water to Mombasa and Kwale counties once finished.
The payroll fraud revelations have intensified public scrutiny over the management of taxpayers’ money, with Kenyans demanding accountability from state institutions long accused of financial mismanagement.
