Prison heist: DCI finally launches probe into Sh42 million prisons payroll fraud

In a major development, DCI fraud sleuths on Monday officially commenced investigations into the prisons' finance payroll breach that saw a rogue accountant log into the system on December 19, 2025, and initiate transfers of allowances for almost 1,000 officers in a single day

The move comes amid growing pressure on the government to crack down on widespread irregularities in the public wage bill.

The shocking scheme saw officers across all ranks receive unsolicited payments ranging from Sh30,000 to Sh140,000, with the total irregular payout amounting to Sh41,346,895. The breach was so outrageous that senior officers who head prisons across the country and are either too senior or on the verge of retirement were included in the transfers, raising immediate red flags. The State Department for Correctional Services oversees 135 penal institutions spread across 8 regions and 47 counties, with a daily average of 61,000 inmates in custody.

When officers reported to Prisons Headquarters in Ruiru to collect their transfer letters, they were shocked to discover the entire exercise was the handiwork of a disgruntled element in the payroll department who had been cleared of their positions due to rampant fraud. According to official records, the Kenya Prisons Service employed 29,998 officers as of 2025, a slight drop from 30,559 in 2024.

Kenya Prisons Commandant Patrick M. Aranduh confirmed to The Standard that the payroll heist happened but says his office was quick to stop further haemorrhage. “Kenya Prisons payroll is not managed by the service. It's managed by civilians from the State Department. When the Auditor General raised questions and in order to streamline the issues raised, the leadership decided to transfer, interdict and bring to book the civilians who were playing games with the payroll. In retaliation, someone then accessed the payroll system using stolen credentials and randomly transferred officers, giving them transfer allowance,” says the commandant.

In a letter dated November 25, 2025, less than a month before the December transfer allowance fraud, the Prisons Department had already alerted a local bank about a separate but equally troubling incident.

"RE: RECALLING OF KENYA PRISONS SERVICE NOVEMBER 2025 SALARIES IRREGULARLY CHANNELED TO YOUR BANK," reads the letter addressed to the bank's Managing Director.

The letter referenced P/9/VOL.II/(69) states: "It has been noted that the following November, 2025 salaries paid to your bank in different branches were irregularly and fraudulently assigned account numbers whose name details do not match the real owners as shown in the by-product."

The Prisons Department instructed the Bank not to process the amounts and return them to the Principal Secretary, State Department for Correctional Services, as investigations into the fraudulent activities were launched.

Arandu further noted: “When this came to our attention, we immediately sat down with the leadership and informed the relevant authorities to take action. We also closed the payroll so that auditors could scrutinise and we set out to have all the money sent out returned to the government. I am glad that, as of now, all the amounts sent were successfully retrieved.” Says Aranduh.

According to the letter, seven accounts received irregular payments totalling Sh2,517,044.10, with the largest single fraudulent payment amounting to Sh1,656,845.25 sent to one Nicholas Maswai through Family Bank's Kilimani branch.

The letter identified the following irregular payments, Benjaline Talam Chelangat- Sh83,679.55 (Milolongo branch), Nicholus Maswai Sh1,656,845.25 (Kilimani branch), Kibet Koske Sh25,746.05 (Ruiru branch), Elizabeth Akinyi- Sh33,271.45 (Westlands branch) Raymond Mwamunye Nyamawi -Sh368,402.90 (Donholm branch), Victor Cheruyot Kimutai Sh336,692.90 (Industrial Area branch) Norman Kyale Muoki- Sh12,406.30 (Nairobi branch)

The fraudulent transfers were flagged when the department noticed that some of the officers affected were senior commanders who had not applied for transfers and were serving in key positions across the country. Sources within the department indicated that the officer who initiated the transfers had accessed the system using compromised credentials.

The development has exposed deep-seated rot in the payroll department following a series of fraud-related dismissals. The department has been grappling with corruption cases, including a Sh450 million scandal where a cleaner and his associates were charged with receiving payments for goods never supplied to prisons.

This latest breach comes months after the Ethics and Anti-Corruption Commission (EACC) uncovered widespread fraud in the State Department for Correctional Services, leading to the arrest of multiple officials, including a cleaner, Eric Kipkirui Mutai, who owned seven companies that received Sh257 million for undelivered goods.

His companies included Homex Logistics, Hygienic Ventures, Nerimas General Agencies, Trechris Services, Unique Supplies, Facton Logistics, and White Unicorn Logistics.

The EACC's findings revealed that the payment vouchers were fake, and there were no Local Purchase Orders (LPOs) or inspection certificates to validate the deliveries. He was arrested and arraigned in court. The case is ongoing.

Meanwhile, Medical officers attached to the Kenya Prisons Service have moved to court seeking payment of non-practice allowance, arguing that their exclusion from the benefit enjoyed by other government health workers amounts to discrimination and unfair labour practice.

The doctors have lodged a case at the Employment and Labour Relations Court challenging the government's failure to pay them non-practice allowance, a benefit routinely paid to medical personnel in other public health facilities.

The medics argue that despite working in high-risk environments with direct contact with inmates in overcrowded wards and confined prison cells, they are excluded from extraneous and risk allowances that are paid to health workers in county hospitals and national referral facilities. The difference in treatment, they say, has created growing frustration among prison health workers who feel left behind despite performing similar roles.

Under previous government circulars, non-practice allowance for legal and medical professionals in public service has been paid at varying rates. In the legal sector, the Public Service circular set non-practice allowance rates at between Sh15,000 and Sh40,000 per month depending on job group.

Beyond remuneration issues, prison health workers who spoke to The Standard have described worsening conditions in correctional facilities, including shortages of essential medicines and medical equipment, deteriorating infrastructure, and severe overcrowding. Some facilities, they said, are operating at nearly double their intended capacity, contributing to the spread of infectious diseases such as tuberculosis and pneumonia.

According to Aranduh, however, the money is available, but the systems are not in place to effect the payment of alliances.

“We are working with the Salaries Commission to regularise how the money should be paid. They are indeed owed and they should be paid their allowance. But this is the uniformed force. The way doctors working in public hospitals get their allowances is a bit different from the disciplined force. So we are actively working with relevant government departments to ensure our doctors get their allowances. They are entitled to it,” he observed.