Counties using ghost workers as schemes to siphon taxpayers’ money, Eacc report shows

County governments in Kenya have been overstretching their budgets spending limits, despite warnings by the Controller of Budget (CoB) even as a report by the Ethics and Anti-Corruption Commission (Eacc) profiled ghost workers as a primary scheme used by county officials to siphon public funds.

In her latest reaction to the fiscal year 2023/24, the Controller of Budget, Margaret Nyakang’o said Ksh15.8 billion was paid to non-existing workers.

Speaking in Naivasha at the Senate’s midterm retreat recently, Nyakang’o noted that the bulk of the amount was processed manually to pay ghost workers. Although the amount siphoned out may have reduced compared to Ksh32 billion reported in 2022/23, the assertion incriminated governors involved in the issue.

The Eacc report showed that ghost workers are one of the seven ways through which counties engage in fraud, leading to bloated and unsustainable wage bills in the country.

The revelation, which comes after cases of unlawful payments to ghost workers and other payroll irregularities appear to be emerging despite counties being advised to verify the county employees and payment data countrywide.

Eacc spokesperson, Eric Ngumbi, said that individuals who do not actually perform any duties but continue to receive salaries funded by taxpayer money will be prosecuted and if found guilty will be told to repay what they received illegally.

Ghost workers are non-existing employees who are on the payroll, but do not actually work for the county.

Renaldo D’Souza, Head of Research & investment at Sterling Capital Limited, acknowledges the ghost workers are a creation of the top management of counties.

He says no county can be accused of having ghost workers and fails to act on it unless they know who the ghost worker is. “On many occasions, people are put on a payroll to siphon money out running into millions from the county,” D’Souza said.

He says most ghost workers in Kenya exist in the public sector.

They are employees who receive fake compensation through pay irregularities. As often the case receives unpaid wages, multiple salaries, or higher pay than their level.

“They may also continue to earn full pay while on leave or transition. Ghost workers drain county finances by costing hundreds of billions of shillings in salaries and pension entitlements,” he says.

The amount just goes down to the drain to fill pockets that do not really deserve it.

“If you go to the counties, you will find that what is being spent on these huge buildings is three times what is provided, which makes you wonder what purpose they serve,” Nyakang’o said pointing to the discrepancies between the SRC’s spending caps and actual expenses.

Vihiga, Kericho, Laikipia, Homa Bay, Nairobi, Elgeyo Marakwet, Uasin Gishu, Nyamira, Siaya, Lamu among others; Ghost workers in Vihiga County were earning Ksh32 million every month based on an audit report of the human resources department.

In 2023, Homa Bay was reported to have gobbled about Ksh300 million to people who did not have papers, presented fake papers, employed under age individuals as employees and others. These individuals upon being identified left but no action was taken against or individuals who were said to have hired them against the number of staff that need to be in place.

This happened as Nyakang’o highlighted that 38 counties failed to meet the legal requirement of spending at least 30 per cent of their budgets on development, with Nairobi (10.03 per cent), Kisii (13.7 per cent), and Mombasa (16.2 per cent) among the worst offenders.

“It is illegal not to meet the 30 per cent threshold; the court had even ruled on this. If you are not spending on development, you are killing devolution,” she said.

Indeed, the existence of the ghost work is an indication of lack of accountability in the counties This revelation has reignited fears over the continued existence of ghost workers in the public sector, a longstanding problem that has been costing the country billions.

County governments surpass their budget ceiling mainly due to inaction of the law and enforcement agencies. Ghost workers are employees who appear on the payroll but are never actually present in the workplace. They are often used as a vehicle for corruption, with salaries being paid to people who do not exist.