President William Ruto chairs a Cabinet meeting at State House, Nairobi, on June 30. 2026.
A review of audit and parliamentary reports and interviews with key agencies have exposed the extent of payroll fraud in government, a key pain point that saw President William Ruto order the Cabinet to review all loopholes in the system.
This followed a sample of 12 out of the country's 53 State Departments and which revealed suspected payroll irregularities amounting to Sh6.2 billion.
As millions of Kenyans tighten their belts, squeezed by the cost-of-living crisis, thousands of rogue members of the public service are enjoying life and living large.
A review of reports by the Auditor General, Controller of Budget (CoB) and the Public Service Commission (PSC) has revealed that Kenya could be losing more than Sh2 billion every month.
The reports show that both the national and county governments flush millions in salaries every month to workers who are non-existent, dead, retired or sacked but remain on the payroll, thereby ballooning Kenya's public wage bill.
For instance, the latest special payroll audit conducted jointly by the Auditor General and the Ministry of Public Service has exposed what could be one of the biggest public sector fraud schemes in recent years.
The audit established that billions of shillings meant for public services may have been lost through ghost workers, irregular payments and manipulated payroll systems.
The sample audit assessed payroll integrity, system integration, compliance, access controls and cybersecurity safeguards.
Taxpayers' money that could have been used to pay thousands of teachers, hire more healthcare workers, improve public health facilities, expand water access, strengthen security or improve roads.
The findings point to one reality — taxpayers have been paying for a system that cannot account for who is on the government's payroll, exposing a glaring governance failure.
So massive is the payroll fraud that it has attracted the attention of the highest office in the land — the Presidency.
At State House Nairobi, President William Ruto, on Wednesday, July 1, chaired a Cabinet meeting that approved sweeping reforms to dismantle payroll fraud in government.
President William Ruto leads prayers before a Cabinet meeting at State House, Nairobi on June 30, 2026.
The Cabinet has now directed the Directorate of Criminal Investigations (DCI) to investigate the fraud.
According to the Cabinet dispatch, the reforms are intended to dismantle "deeply entrenched and decades-long payroll fraud" in government, restore integrity to the public wage bill and protect taxpayers' money through a whole-of-government payroll overhaul.
A comprehensive payroll audit found widespread weaknesses in payroll governance.
"A sample review of 12 out of the country's 53 State Departments revealed suspected payroll irregularities amounting to Sh6.2 billion, including unauthorised alterations to payroll records, irregular payments, weak controls over statutory deductions, fragmented payroll management and significant oversight gaps," reads part of the Cabinet communiqué.
"Consequently, the Cabinet directed the Directorate of Criminal Investigations to investigate the 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 further states.
The Cabinet also ordered the immediate implementation of a comprehensive payroll reform programme, including a government-wide 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.
Public Service Cabinet Secretary Geoffrey Ruku last month said the payroll fraud involves cases of job group manipulation, where civil servants are irregularly promoted or placed in higher salary brackets within short periods, without due process.
Since his appointment to the Cabinet, Mr Ruku has repeatedly admitted that the government was losing billions of shillings every year to rogue workers, managers and cartels that have infiltrated the public service.
Public Service and Special Programmes Cabinet Secretary Geoffrey Ruku addresses journalists at NYS Engineering Institute on March 8, 2026.
In his latest admission a few weeks ago, Mr Ruku revealed that a recent audit of the public service's human resource systems uncovered widespread malpractice, collusion and systemic abuse aimed at siphoning public funds.
Although he did not divulge the numbers, the CS said "hundreds of civil servants" are under investigation.
In drastic measures aimed at taming the fraud and eliminating ghost workers, in May 2026, Mr Ruku directed all government institutions to migrate their human resource management operations to a centralised and tamper-proof Human Resource System (HRS).
"All Human Resource management functions must now be managed from one integrated system that is secure, verifiable and impossible to manipulate," said Ruku.
He also revealed that civil servants who reached retirement age years ago were still working in government, thanks to a cartel that has facilitated the backdating of their ages.
"We have established the existence of widespread malpractice, including employees using fake academic documents to secure promotions, backdating birth certificates and drawing double allowances," said CS Ruku.
"We have reports that some civil servants are earning double allowances, while others have been exempted from paying taxes, and this is costing the government billions of shillings," he added.
Another recent report by the Public Service Commission made shocking revelations that the civil service has over 17,000 ghost workers benefiting from taxpayers' hard-earned cash.
The report revealed that the fictitious workers, who do not exist, have been placed on the records of various national government agencies, further deepening concerns about the misuse of public funds.
The compliance report released in 2025 showed several government institutions such as the Kenya Broadcasting Corporation (KBC) and Kenya Railways listing more employees than are physically present at their offices.
"The staff recorded in the staff register exceeded the number of staff reported to be in post against the authorised establishment by 17, 000," reads the report.
According to the report, the issue of ghost workers is not confined to a few departments but is widespread across ministries, State corporations and public universities.
The review established that whereas Kenya Railways had 3,287 officers in the biodata, only 2,026 were in post.
The Kenya Broadcasting Corporation had 231 officers who were in the national broadcaster’s register but not in any post, yet they continued to draw salaries.
Ministries had the highest number, with 12,329 additional staff, having 60,228 staff holding positions while staff registers had 72,557.
State corporations had an extra 2,486 staffers, public universities had 1,885, commissions and independent offices 225, and statutory authorities 75.
PSC said it has directed the concerned agencies to explain the discrepancies in their employee databases and the physical numbers.
Some 67 institutions that were sampled in the review, among them Kenya Railways, had an unexplained excess of 2,326 staffers.
Weaknesses in payroll management
Another 103 had 3,354 more workers in the staff registers than those reported to be in post, while 136 had no variances.
Meru University was found with 75 untraceable staffers, 21 at Kirinyaga University, 16 at Jaramogi Oginga Odinga University of Science and Technology (JOOUST), and 27 at the University of Nairobi.
But this is not the first time Kenya has lost money through payroll fraud.
For years, the Auditor General and the Controller of Budget have repeatedly raised red flags over Kenya's ballooning wage bill and weaknesses in payroll management.
Among the concerns raised in recent years are thousands of employees whose records cannot be verified, public officers drawing salaries even after retirement or death, agencies paying workers outside approved establishments, cases of duplicate payroll numbers, unexplained salary increments, and weak reconciliation between payroll records and Human Resource databases.
Despite President William Ruto's latest action, critics say the response came too late.
President William Ruto when he signed into law the Finance Bill, 2026 and other Bills at State House, Nairobi on June 23, 2026.
"Payroll fraud has been a headache in this country and President William Ruto should have acted when he took over office. How did billions of shillings disappear under the watch of accounting officers, internal auditors and other oversight agencies? Will there be arrests and convictions? Will the stolen money be recovered? We demand action," stated Dr Peter Mbae, the Democracy for Citizens Party (DCP) Secretary for Economic Planning.
Governance experts say payroll fraud is a systematic failure that has been thriving on structural weaknesses, poor oversight and broken internal controls.
"It is shocking that in 2026 hundreds of civil servants who are dead or past the mandatory retirement age of 60 years still continue drawing salaries. That is evidence of systemic failures and a concern for fiscal waste and blocked opportunities for the youth," governance expert David Ngugi told the Nation.
Payroll fraud has also nearly crippled services in the 47 counties.
The Ethics and Anti-Corruption Commission (EACC) revealed that the increasing wage bills in many counties stem from governors exerting control over departments such as county public service boards, thereby manipulating employment processes.
"One common method involves the presence of ghost workers, non-existent employees who appear on paper but do not contribute to county operations. These individuals receive salaries, retain a small percentage and hand over the remainder to their superiors," revealed EACC boss Abdi Mohamud.
"Another method is over-employment, which involves hiring more staff than necessary, particularly at lower levels, driven by nepotism and political favouritism. As a result, a significant portion of public funds is spent on salaries instead of development and service delivery. Some counties also employ individuals with forged academic certificates, treating employment as a means of rewarding political supporters, relatives and associates rather than hiring qualified personnel," he added.
Furthermore, according to EACC, there are instances where counties continue paying salaries to employees who have already retired or otherwise left their positions.
Other methods include multiple employment, where employees hold jobs in more than one county or institution simultaneously; counties hiring unqualified persons while disregarding the necessary qualifications for their positions; and, in some cases, employees being assigned to higher grades, allowing them to earn salaries that exceed their actual qualifications.
According to EACC, payroll fraud and the presence of ghost workers are fuelled by the impunity of county officials.
Special audits conducted by the Auditor General in January 2026 revealed massive payroll fraud in county governments.
The audit report showed that about a quarter of workers in 26 counties could be non-existent, raising concerns over possible fraud that may have cost taxpayers billions of shillings.
Nearly 600 county employees sampled in 26 counties failed to appear for verification, raising fears that millions of shillings may have been paid to ghost workers over the past four years.
The unverified employees collectively received Sh978 million during the year under review, with Machakos, Mandera and Kajiado counties among the worst affected.
The audits, conducted between December 2024 and February 2025, involved a sample of 2,354 workers from county payrolls.
County governments were asked to present the selected employees for physical verification.
Of these, 596 employees did not appear, leaving auditors unable to confirm whether they were genuine staff or ghost workers.
Machakos County recorded the highest number of suspected ghost workers, with more than half of the employees summoned by auditors failing to appear.
The latest report by Auditor General Nancy Gathungu, covering the financial year ending June 30, 2025, revealed that some employees in Bomet, Garissa, Isiolo, Samburu, Nyeri, Migori, Nyamira and Embu counties have been earning salaries and allowances illegally were not persons living with disabilities and did not possess special skills; or were living with disabilities but had long retired.
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