President William Ruto has directed payroll audit of the Government payroll system after an audit uncovered suspected irregularities of KSh6.2 billion across 12 State departments.
The decision follows a Cabinet meeting chaired by President Ruto at State House, Nairobi, on June 30, 2026.
The Cabinet said the reforms follow a comprehensive review that revealed widespread weaknesses in payroll governance, including unauthorized alterations to payroll records, irregular payments, weak controls over statutory deductions and fragmented payroll management systems.
“The decision follows a comprehensive Government payroll audit that uncovered widespread weaknesses in payroll governance. A sample audit of 12 of the 53 State Departments revealed suspected payroll irregularities amounting to KSh6.2 billion, exposing unauthorized alterations to payroll records, irregular payments, weak controls over statutory deductions, and fragmented payroll management and major oversight gaps,” read the statement.
Cabinet Orders Criminal Investigations into Payroll Fraud
The audit uncovered unauthorized alterations to payroll records, irregular salary payments, inadequate controls over statutory deductions, fragmented payroll administration systems and major gaps in oversight mechanisms.
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In response, Cabinet directed the Directorate of Criminal Investigations (DCI) to immediately commence investigations into suspected payroll fraud networks operating within the public service.
The DCI has been tasked with verifying personal identification numbers used in payroll processing, identifying and dismantling criminal syndicates that manipulate government payroll systems, recovering public funds lost through fraudulent activities, and ensuring the arrest and prosecution of individuals found responsible.
To prevent future losses, Cabinet ordered the immediate implementation of a comprehensive payroll reform programme across all ministries, departments, agencies and state corporations.
“The meeting 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,” read the statement.
Cabinet Establishes AI Committee for Responsible Adoption
The meeting also approved major initiatives aimed at positioning Kenya as a regional leader in technology and digital services.
The Cabinet established a Standing Cabinet Committee on Artificial Intelligence (AI) to spearhead the country’s national AI strategy, coordinate government policy, and oversee the responsible development and deployment of technologies.
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The committee will be responsible for promoting AI-driven innovation, improving public service delivery, enhancing productivity, creating employment opportunities and supporting inclusive economic growth while ensuring adequate governance frameworks and safeguards are established.
“Looking ahead, Cabinet established a Standing Cabinet Committee on Artificial Intelligence to steer Kenya’s national AI strategy, coordinate policy across Government and position the country as a regional leader in the responsible development and adoption of artificial intelligence,” read part of the statement.
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