Auditor General's report reveals Ksh.67B lost through fake pension scheme payments

Auditor General Nancy Gathungu has lifted the lid on the Ksh.67 billion loss of public funds through fake payments made to pensioners whose realness is also in question.

The performance report by the Auditor General on the fund shows that top civil servants manning the scheme were among others using duplicate IDs to enrol fake claimants, occasioning the loss of taxpayers' money. 

Officials in the National Treasury are said to have colluded to defraud the pension fund of billions of shillings through the enrolment of non-existent persons or double payments to duplicate bank accounts.

The report has flagged 260,242 fake claimants that have occasioned the loss of Ksh.67.9 billion.

The audit team has noted that, in one instance, 419 persons were enrolled into the pension scheme irregularly and paid Ksh.555.9 million.

As if that was not enough, officials at the Treasury's pension department paid 273 persons a total of Ksh.26.9 million yet the claimants were registered after the payments were made.

In yet another illustration of irregularities in the pension fund, 962 persons were paid Ksh.1.6 billion even before they exited their jobs, meaning they have been enjoying their pension before their retirement from public service.

Another Ksh.44 billion was paid by the Treasury to faceless individuals without Kenya Revenue Authority (KRA) PIN certificates.

The report that covered the period of pension payments from 2013 to 2020 also revealed that another sum of Ksh.152.8 million was paid to claimants who shared identification cards.

A similar case was detected by auditors of individuals who were paid a total sum of Ksh.20.9 billion but 29,387 of them shared bank accounts where the billions were stashed.

Another 214 other persons were paid Ksh.492 million as pension but upon scrutiny, the individuals were never under the pension scheme.

The report notes serious systemic loopholes in the pension scheme with the majority of the irregularities found in the Ministry of Foreign Affairs, National Treasury, Health, the Department Of Prisons, Transport, Water, Investment and Industry, Social Protection, Judiciary and the Teachers’ Service Commission.