A fresh audit has cast doubt on the reliability of Kenya’s pension payments, with billions of shillings flagged over missing records, delayed processing, and long-running financial discrepancies that remain unresolved.
The Auditor General’s report for the financial year ending June 2024 shows that pension payments amounting to Sh118.55 billion could not be fully verified due to gaps in data and inconsistencies in documentation.
The payments under review include Sh61.68 billion for civil pensions and Sh8.4 billion for military pensions, all of which the audit says cannot be confirmed as accurate.
“However, as previously reported, the payroll provided for audit review had some missing pensioners’ details, such as ID numbers, while some pensioner employee numbers had been recorded as ‘DUMMY’,” Gathungu said.
“In the circumstances, the credibility and integrity of the pensioners’ data used for processing pension payments could not be confirmed.”
Pension payments are meant to support retired public workers or their dependants after leaving service due to age, illness, injury, or death.
The report also raises concern over questionable transactions, pointing to Sh15.64 billion reflected in bank records but not captured in the cash book. Of this, Sh14.89 billion has remained unresolved since 2008.
“Although management attributed this to fraudulent payments that were made through the CFS Pension and Gratuities bank account, and that after investigations and court proceedings, the accused were acquitted, it was not clear why it had taken unduly long to clear the items from the bank reconciliation statement,” Gathungu said.
At the same time, returned pension payments have continued to rise, hitting Sh7.1 billion in the 2023/24 financial year, up from Sh6.7 billion the previous year.
“The balance has been increasing mainly due to the demise of pensioners or the lack of claims by dependants. Further, the department did not have the funds in the bank account to pay the returned pensions if they were to be claimed by the beneficiaries,” Gathungu said.
The audit further shows that some pension payments have remained unsettled for more than 10 years, highlighting ongoing challenges in clearing pending claims.
In the period under review, pension payments totalled Sh118.55 billion against an allocation of Sh154.5 billion.
Delays in processing claims remain a major concern, with the audit showing an average processing time of 195 days, far beyond the 90 days required under the National Treasury service charter.
A separate review by the Office of the Auditor General links the delays to inefficiencies in the pensions department, including late submission of claims and incomplete documentation from government institutions.
Although the Citizen Delivery Charter requires that claims be processed within 21 days after all documents are submitted, the audit found that some cases take years to conclude.
Previous findings by the Commission on Administrative Justice have also faulted the National Treasury over how pension claims are handled, citing delays, non-payment, and poor response.
Pension and gratuity payments are guided by the Pensions Act and related laws, which are meant to ensure retirees and their dependants can meet basic needs such as healthcare, housing, and education.
The Pensions Department is responsible for handling retirement benefits for a wide group of public servants, including former presidents, MPs, teachers, military officers, and civil servants.
The Human Resource Policies and Procedures Manual for the Public Service (2015) requires that retirement claims be submitted at least nine months before exit to allow time for verification and correction of any errors.
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