The National Treasury has directed all counties to process April salaries using a new system that is aimed at weeding out ghost workers from their payrolls.
The new system integrates salary payments with all statutory deductions, such as SHA, NSSF, PAYE, Pension Deductions, NITA and others.
In a circular dated April 8, Treasury PS Chris Kiptoo says that together with the State Department of Public Service, the integrated HRIS-Kenya payroll system, with the IFMIS system, will streamline all statutory deductions.
“The statutory deductions have been twinned together with Net Salary Pay and are immediately forwarded to the respective government entities to support their constitutional obligations effectively,” PS Kiptoo says in the circular to all county CECMs for Finance and County Assembly Clerks.
Other than sorting out the issue of ghost workers, the system is also said to be addressing non-remittance of statutory deductions by state agencies.
He said the integration has been successfully piloted to all National Government State departments and some of the County Assemblies.
“Therefore, to support these constitutional entities in executing their mandatory duties, it’s prudent for all Accounting Officers to comply by utilising the integration module,” the Treasury boss said.
Counties that fail to use the new system have been informed that the Controller of Budget (COB) will not approve any request for salaries from the exchequer made outside it.
He added, “The purpose of this letter, therefore, is to bring this matter to your attention and request you to process your April 2026 Payroll using the integrated module. The Office of the Controller of Budget (COB) will only fund exchequer requests for salaries submitted through the integrated module.”
Estimates suggest that in the 2024/25 fiscal year, up to Sh33.5 billion could have been lost to non-existent staff across 26 counties, with some counties having between 28 per cent and 52 per cent of sampled staff failing to turn up for verification.
Recent audits have also revealed that 40 counties were involved in a Sh1.5 billion payroll scandal in late 2024 to early 2025, with many using manual, non-integrated systems to pay these workers.
The audits highlighted significant, untraceable staff in Nairobi (30.3 per cent), Samburu (33.7 per cent), Nandi (38.2 per cent), Mombasa (28 per cent), and Kakamega (28 per cent).
Common examples are witnessed in Vihiga, Kericho, Laikipia, Nyamira, Siaya, and Lamu, among others. Ghost workers in Vihiga County were earning Sh32 million every month based on an audit report of the human resources department.
A report by the Vihiga County Public Service Board (CPSB) showed about 426 employees could not be traced at their duty stations during the audit.
While in Kericho County, Auditor General Nancy Gathungu flagged the possibility of ghost workers, citing the fact that 1955 employees have not been allocated personal numbers and were being paid outside the Integrated Personnel and Payroll Database.
The auditor noted that the lack of personal numbers may lead to loss of funds through ghost workers.
A similar case occurred in the county government of Lamu, where a probe showed the presence of at least 112 ghost workers on the county’s payroll for years.
The third Human Resource Audit Report of 2022, which targeted over 100 work stations and 1,693 county personnel, revealed that 112 suspicious names could not be accounted for, yet were earning salaries and other benefits from the county government.
In Nyamira County, the county leadership was tasked to explain how the devolved unit lost Sh2.8 billion in salaries allegedly paid to ghost workers in the financial year 2018/2019.
The county Governor was put to task to explain the existence of the 736 employees as he appeared before the Senate County Public Accounts and Investment Committee.
In Laikipia County, the county boss fired 176 workers over what was termed as a reduction of costs.
The county’s top leadership risked being jailed for failing to comply with the Public Finance Management Act 2012, which stipulates a wage bill ceiling of 35%. Before the retrenchment, the county’s wage bill stood at 58 per cent.
