Treasury Directives on April County Payrolls: Inside the Move to Stop Sh33B Ghost Worker Losses

The National Treasury has officially directed all 47 county governments to transition exclusively to a newly integrated payroll system.

The directive, issued via an official circular by National Treasury Principal Secretary Chris Kiptoo, mandates that April salaries be processed by linking the Human Resource Information System (HRIS-Kenya) directly with the Integrated Financial Management Information System (IFMIS). This synchronization serves as a decisive intervention to secure public funds and enforce fiscal accountability across devolved units.

The implementation of this system marks a major structural shift for local county leadership teams, driven by three major enforcement mechanisms.

1. Eradicating the Sh33.5 Billion Ghost Worker Leakage

County payrolls have faced prolonged vulnerabilities regarding “ghost workers”—non-existent personnel who drain vital public resources. Recent baseline audit estimates indicate that up to Sh33.5 billion was lost to phantom staff during the 2024/25 fiscal year alone.

Verification audits highlighted severe discrepancies in several counties where large percentages of sampled personnel failed to appear for identification checks:

• Nandi County: 38.2% untraceable staff.

• Samburu County: 33.7% untraceable staff.

• Nairobi County: 30.3% untraceable staff.

• Mombasa & Kakamega: 28% untraceable staff.

By migrating all staff onto the integrated module, the National Treasury ensures that every salary payment is strictly tied to a verified, active employee identity, completely closing manual loopholes.

2. Automating Statutory Deductions for Immediate Remittance

Beyond identifying payroll irregularities, the integrated platform streamlines how mandatory statutory deductions are managed. Previously, several state agencies and county units struggled with non-remittance, leaving workers exposed without proper coverage.

Under the new directive, key deductions are automatically “twinned” with net salary distributions:

• SHA: Social Health Authority contributions.

• NSSF: National Social Security Fund (incorporating the updated Year 4 rates).

• PAYE: Pay As You Earn income tax.

• Pension: Standard county retirement contributions.

When a payroll is run, the system instantly processes the net pay while simultaneously forwarding the deducted levies to their respective government entities.

3. The Controller of Budget Hard Enforcement Mechanism

Compliance with this circular is strictly enforced by a financial block. The Treasury has instituted an absolute bottleneck: the Office of the Controller of Budget (COB) will strictly reject any exchequer salary requests submitted outside the integrated HRIS-IFMIS module.