Shockingly, the County Executive recorded 16,321 employees in the Integrated Payroll and Personnel Database (IPPD) against an approved staff establishment of 13,587, representing an over-establishment of 20 per cent. “The percentage of budgeted compensation of employees to the budgeted revenue grew from twenty-one (21%) in 2021/2022 to forty-six (46%) in 2023/2024, indicating a growing wage bill that has limited funds available for essential service delivery,” the report reads in part.
To unlock the full article:
Choose one of the options below:
- Ksh 10 – This article only
- Ksh 300 – Monthly subscription
- Ksh 2340 – Yearly subscription (10% off)
By TWV Investigative Desk
A special audit by the Office of the Auditor-General has uncovered a massive payroll fraud scandal within the Nairobi City County Government, revealing how Governor Johnson Sakaja’s administration paid billions of shillings to ghost workers, duplicate employees, and irregular allowances over three consecutive financial years.
According to Auditor-General Nancy Gathungu, Nairobi County paid salaries amounting to KSh 1.7 billion to more than 8,000 non-existent employees, while others appeared in the payroll twice or received arrears for allowances that had already been paid.
The report further reveals that the County disbursed another KSh 1.8 billion on questionable items described as choir allowances, subscriptions to professional bodies, and other unexplained payments.
The special audit, covering financial years 2021/2022, 2022/2023, and 2023/2024, established that the ratio of budgeted compensation for employees to the County’s total revenue had exceeded the legally allowed 35 percent threshold, a clear violation of the Public Finance Management (PFM) regulations.
Shockingly, the County Executive recorded 16,321 employees in the Integrated Payroll and Personnel Database (IPPD) against an approved staff establishment of 13,587, representing an over-establishment of 20 percent. The report warns that this has severely strained Nairobi’s financial resources, starving critical development projects of funding. “The percentage of budgeted compensation of employees to the budgeted revenue grew from twenty-one (21%) percent in 2021/2022 to forty-six (46%) percent in 2023/2024, indicating a growing wage bill that has limited funds available for essential service delivery,” the report reads in part.
When 89 employees from the County Executive were summoned for physical verification, 27 employees who had received KSh 47.5 million failed to show up despite repeated attempts to reach them. The Auditor-General concluded that these individuals likely do not exist.
An additional 10 employees, paid KSh 6 million, were found in the payroll system but not in the official staff list provided to auditors. Another 285 employees appeared in the staff lists of various chief officers but not in the IPPD system, raising red flags of parallel payroll manipulation. “The failure to account for human resources in various departments presents the risk of irregular or fraudulent payments in the County Executive,” reads the audit.
The audit also uncovered that 978 employees were promoted more than once within a single financial year or skipped job groups altogether, with no documentation provided to justify the changes. Investigators say such irregular promotions are often used to inflate salaries and reward politically connected staff.
Further, 6,899 employees were paid KSh 288.3 million in overtime allowances without proper authorisation, while 3,677 employees not entitled to overtime under the Collective Bargaining Agreement received KSh 36 million irregularly.
Additionally, 559 employees from defunct local authorities pocketed KSh 126.7 million in extraneous allowances with no evidence of having performed additional duties. Another 961 employees, who were not part of the defunct authorities, were paid KSh 167.1 million under the same category.
The report exposes how KSh 211.4 million was paid out as extraneous allowances disguised as salary arrears, effectively bypassing payroll controls. The Auditor-General notes that the payments lacked approval from the Salaries and Remuneration Commission (SRC) and violated public service pay guidelines. “The management did not explain why the allowance was paid as arrears, yet the allowance had a dedicated earning code in the IPPD system,” Gathungu noted.
In another disturbing revelation, 198 employees were found with inconsistent dates of birth in official records, while 27 others had birth dates in the IPPD system that did not match their birth certificates. Such discrepancies, the report says, pose the risk of prolonging employment beyond the legal retirement age or wrongly calculating pension dues.
The findings point to a deep-rooted and well-coordinated network of payroll manipulation within Nairobi County’s Executive, involving officials from the Human Resource, Finance, and ICT departments. “The diversion of salary funds to finance non-salary expenditures compromises financial accountability and contravenes budgetary principles,” the report warns, adding that such practices could delay genuine staff salaries and demoralise county employees.
While Governor Sakaja has yet to issue a formal response to the Auditor-General’s findings, the revelations have triggered public outrage and calls for the Ethics and Anti-Corruption Commission (EACC) to open a formal investigation into what could be one of Kenya’s largest county payroll frauds in recent years.
If proven, the scandal could expose senior county officials, and possibly the political leadership, to charges of financial misappropriation, abuse of office, and economic crimes under the Anti-Corruption and Economic Crimes Act.
The Nairobi payroll audit underscores a wider national problem: ghost workers, bloated wage bills, and weak payroll controls in devolved governments. Similar findings have emerged in other counties, but Nairobi’s case, given its scale and budget size, may represent the most serious breach of public financial discipline yet.
As investigations progress, Kenyans will be watching to see whether the billions allegedly looted through ghost salaries will be recovered, or whether this report will, like many before it, be quietly buried.
[/full]
