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Auditor General reveals Sh67 billion loss in fraudulent pension payments

Auditor General Nancy Gathungu

By Patel Okumu | Friday, January 5, 2024

Auditor General Nancy Gathungu has exposed a massive loss of Sh67 billion in public funds due to fraudulent payments made to questionable pensioners.

Auditor General Nancy Gathungu has exposed a massive loss of Sh67 billion in public funds due to fraudulent payments made to questionable pensioners. The performance report reveals that high-ranking civil servants within the scheme were involved in enrolling fake claimants, using duplicate IDs and orchestrating a severe drain on taxpayers' money.

The investigation indicates collusion within the National Treasury, where officials schemed to defraud the pension fund by enrolling non-existent individuals or making double payments to duplicate bank accounts. The Auditor General's report has raised concerns about 260,242 fake claimants, resulting in a staggering loss of Sh67.9 billion.

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The audit team uncovered a case where 419 individuals were irregularly enrolled in the pension scheme, leading to payments totaling Sh555.9 million. Additionally, officials at the Treasury's pension department disbursed Sh26.9 million to 273 claimants after their registration, showcasing further irregularities.

Further highlighting the pension fund's irregularities, the report exposed that 962 individuals received Sh1.6 billion before retiring from public service, allowing them to enjoy their pensions prematurely. Shockingly, Sh44 billion was paid to unidentified individuals lacking Kenya Revenue Authority (KRA) PIN certificates.

Covering the period from 2013 to 2020, the report unveiled that Sh152.8 million was paid to claimants who shared identification cards, indicating a serious lack of due diligence. Moreover, auditors discovered a case where Sh20.9 billion was disbursed to individuals sharing bank accounts, involving 29,387 beneficiaries.

In another alarming revelation, 214 individuals received Sh492 million as pension payments, yet they were never part of the pension scheme. The report pointed to systemic loopholes within the pension scheme, with numerous irregularities concentrated in ministries such as Foreign Affairs, National Treasury, Health, Prisons, Transport, Water, Investment and Industry, Social Protection, Judiciary, and the Teachers’ Service Commission.