Auditor General Nancy Gathungu Discloses KSh 67b Was Lost Through Fake Pension Payments

• Auditor General Nancy Gathungu revealed the funds were misappropriated through fraudulent payments made to 260,242 pensioners with questionable legitimacy
• Gathungu's report showed that high-ranking civil servants overseeing the scheme were involved in using duplicate identity cards (IDs) to register fake claimants
• The exchequer disbursed KSh 44 billion to unidentified individuals lacking Kenya Revenue Authority (KRA) PIN certificates

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

Auditor General Nancy Gathungu has exposed how officials at the National Treasury siphoned a whopping KSh 67 billion of public funds.

How pension funds were misappropriated

The funds were misappropriated through fraudulent payments made to 260,242 pensioners, whose legitimacy is now questionable.

Gathungu's report revealed that high-ranking civil servants overseeing the scheme were involved in using duplicate identity cards (IDs) to register fake claimants. The deceitful practice resulted in a substantial loss of taxpayers' money.

According to Citizen Digital, officials in the National Treasury collaborated to defraud the pension fund of billions of shillings.

This was achieved by enrolling nonexistent individuals or making double payments to duplicate bank accounts.

Daily Nation reported that the loss of funds was attributed to weaknesses in the Pension Management Information System (PMIS).

"The effect of anomalies in the PMIS is irregular payments that have compromised the operations and have resulted in many beneficiaries waiting for too long to get paid, "the audit report on pensions stated.

How Treasury officials siphoned public funds

In one instance, rogue Treasury officials enrolled fake 419 claimants and paid KSh 555.9 million.

In a separate case, the officials paid KSh 1.6 billion to 962 people before they retired.

The exchequer disbursed an additional KSh 44 billion to unidentified individuals lacking Kenya Revenue Authority (KRA) PIN certificates.

An additional 214 individuals received KSh 492 million as pension payments; however, upon closer examination, it was revealed that these individuals were never part of the pension scheme.

Salaries scandal

Elsewhere, Controller of Budget (CoB) Margaret Nyakang'o released the national government budget implementation review report for the first nine months of the financial year 2022/23.

Her report revealed that KSh 363.66 billion was processed as salaries through the integrated personnel and payroll database and other approved systems.

However, she noted that KSh 5.66 billion was paid outside the prescribed payroll management system, exposing another scandal.