Recent audits have uncovered that many Kenyan counties deliberately ignored the Integrated Personnel and Payroll Database (IPPD) system, leading to over 27,000 irregular recruitments, untraceable staff payments and widespread breach of the 35% personnel spending cap up to June 2025.
Fresh audits have revealed that a significant number of Kenya's 47 counties deliberately ignored the Integrated Personnel and Payroll Database (IPPD) system, enabling over 27,000 irregular recruitments, untraceable staff payments and widespread violation of the 35% personnel emoluments spending cap in the financial year ending June 2025.
The reports, tabled in Parliament by the Auditor-General in December 2025, paint a picture of systemic disregard for payroll controls meant to prevent ghost workers, unauthorised hiring and excessive wage bills. Counties were required to integrate all staff recruitment, payroll processing and payment through IPPD to ensure transparency, but many opted for manual hiring and direct bank transfers, bypassing the system entirely.
Auditor-General Nancy Gathungu highlighted the scale of non-compliance in her presentation to the Public Accounts Committee. “The IPPD system was designed to be the single source of truth for county payroll,” Gathungu said. “Yet we found counties recruiting thousands of staff outside IPPD, creating ghost workers and inflating wage bills far beyond the legal 35% threshold. This is not oversight; it is a deliberate circumvention of controls.”
The audit identified 27,413 irregular recruitments across 32 counties, where employees were hired without entering their details into IPPD. These staff received salaries through direct bank transfers or manual cheques, making it impossible to verify their existence, job descriptions or qualifications. In several cases, salaries continued to be paid to individuals who had left service, resigned or died, creating ghost workers on the payroll.
One county alone was found to have 4,872 staff on payroll who could not be traced in IPPD records. “These are not small numbers,” Gathungu noted. “The financial impact runs into billions of shillings annually, money that could have gone to development projects, health facilities or education.”
The breach of the 35% personnel emoluments cap was equally widespread. The Public Finance Management Act limits counties to spending no more than 35% of their total revenue on wages and salaries. The audits showed 28 counties exceeded the cap, with some spending as much as 58% of their budgets on payroll. In total, excess spending above the cap was estimated at KSh 48 billion in the financial year under review.
County Finance Officers have been blamed for failing to enforce compliance. “The cap is clear, but counties continued hiring without regard for the law,” said a member of the County Allocation of Revenue Fund who requested anonymity. “When auditors raise red flags, the response is often to challenge the findings instead of correcting the payroll.”
The Controller of Budget, Margaret Nyakang’o, who monitors county spending, expressed alarm at the findings. “Ignoring IPPD creates a perfect environment for ghost workers and payroll fraud,” Nyakang’o said. “We have repeatedly warned counties to adhere to the system, but many choose convenience over accountability. This must stop.”
Some county executives defended their actions, claiming IPPD was slow and unreliable. A governor from one of the affected counties said: “The system crashes frequently, and we cannot wait for IPPD to process payroll while workers go unpaid. We had to find alternatives to keep services running.”
The Auditor-General rejected the excuse. “Technical challenges do not justify breaking the law,” Gathungu said. “Counties have had years to build capacity and integrate properly. Bypassing IPPD is a choice, not a necessity.”
The reports have renewed calls for stronger oversight. The Senate Committee on County Public Accounts has summoned 19 governors whose counties recorded the worst violations. Committee chairperson Sen. Samson Cherargei said: “We will not accept excuses. These are public funds meant for development, not for ghost payrolls and irregular hiring.”
The Controller of Budget has recommended that counties found in breach of the 35% cap be barred from borrowing or receiving additional grants until compliance is achieved. “We are prepared to enforce the law,” Nyakang’o said. “Counties must live within their means.”
The National Taxpayers Association has called for criminal investigations into counties with the highest numbers of irregular hires. “This is theft by payroll manipulation,” NTA chairman Juma Ngao said. “Those responsible must face prosecution.”
As pressure mounts, counties have begun scrambling to clean up their payrolls. Several have announced plans to migrate all staff to IPPD by March 2026 and conduct internal audits to identify and remove ghost workers.
The saga underscores the ongoing struggle for fiscal discipline at the county level, years after devolution was meant to bring accountability closer to the people. With billions potentially lost to irregular hiring and ghost workers, the audits serve as a stark reminder that strong systems alone are not enough—political will and enforcement are equally critical.
Former Kiambu Governor Ferdinand Waititu has secured a major bail reprieve from the High Court, with Justice Winfrida Okwany reducing his bail from Sh53.5 million to Sh20 million cash pending appeal in his ongoing corruption case.
President Ruto and Governor Sakaja signed a cooperation agreement allocating funds for 50,000 new streetlights, water plants saving 50 million litres daily, 27 km Nairobi River sewer and ward road upgrades, with Ruto calling it a partnership to make the city livable while opposition senators warn of devolution threats.
A staff member at Moi Teaching and Referral Hospital allegedly stole Sh10 million by falsifying patient bills as paid in the eCitizen system while diverting the money to her personal account, prompting an ongoing police and hospital investigation.
