The government has ordered an extensive investigation into suspected payroll fraud across public institutions after an audit uncoveredt irregular payments estimated at Ksh.6.2 billion in 12 State Departments, triggering a major reform programme aimed at tightening control over the public wage bill.
The directive was issued during a Cabinet meeting chaired by President William Ruto at State House, Nairobi, where ministers approved a raft of measures to eliminate what the government described as long-standing abuse within public payroll systems and safeguard taxpayers’ money.
A review covering 12 of the country’s 53 State Departments uncovered suspected cases of unauthorised payroll alterations, questionable salary payments, weak management of statutory deductions, fragmented payroll systems and gaps in oversight.
The findings prompted Cabinet to order criminal investigations into those believed to have manipulated government payroll records.
“Consequently, Cabinet directed the Directorate of Criminal Investigations to investigate 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 Cabinet dispatch stated.
Alongside the investigations, the government approved a comprehensive overhaul of payroll management across all ministries, departments, agencies and State corporations.
“The meeting also ordered the immediate implementation of a comprehensive payroll reform programme, including a Governmentwide 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,” the dispatch added.
Cabinet also introduced measures aimed at reducing government expenditure by freezing the leasing or hiring of additional office space until an audit of office utilisation is completed.
At the same time, it directed the preparation of a programme to renovate existing public offices to improve efficiency in service delivery.
In another key decision, ministers approved the establishment of a Standing Cabinet Committee on Artificial Intelligence to coordinate Kenya’s AI agenda and guide the responsible adoption of emerging technologies.
The committee is expected to promote innovation, improve public service delivery, create employment opportunities and develop governance frameworks for artificial intelligence.
To strengthen the country’s digital economy, Cabinet also adopted the National Business Process Outsourcing Policy, which seeks to position Kenya as a leading global outsourcing destination by leveraging its skilled workforce, favourable time zone and expanding digital infrastructure.
The government expects the policy to attract investment and create thousands of jobs for young people as demand for outsourcing services continues to grow globally.
With forecasts pointing to moderate-to-strong El Niño rains later this year, Cabinet further constituted and Hoc Cabinet Committee on El Niño Preparedness and Response, chaired by Deputy President Kithure Kindiki.
“The committee will immediately activate a National El Niño Contingency Plan covering flood mitigation, evacuation and shelter arrangements, drainage clearance, reinforcement of vulnerable roads and bridges, pre-positioning of emergency equipment and medical supplies, farmer advisories, and a contingency fund for relief, recovery and rehabilitation,” the dispatch noted.
The meeting also approved several major development projects, including the Ksh.26 billion Judicial Performance Improvement Project Phase II, which will support the construction of new judicial facilities in partnership with the World Bank.
Cabinet further authorised an additional Ksh.16.6 billion for the completion of the Mwache Multipurpose Dam in Kwale County, a project expected to improve water supply for Mombasa and Kwale, expand irrigation and strengthen climate resilience.
The resolutions signal a broader government effort to strengthen accountability in public institutions while advancing key infrastructure and digital transformation programmes.
If fully implemented, the reforms are expected to enhance financial discipline, improve service delivery and restore public confidence in the management of state resources.
