Auditor General flags CBK for hiring unqualified managers, ignoring HR Policies

The Central Bank of Kenya in Nairobi. (Photo: Handout)

By Lucy Mumbi
Tuesday, October 21, 2025

The report notes that the CBK recruited managers who did not fully meet the mandatory experience or service period requirements.

The Central Bank of Kenya (CBK) is on spot for flouting human resource policies, including hiring unqualified managers, ignoring salary regulations and mishandling staff secondments.

Auditor General Nancy Gathungu, in her latest report, warned that these breaches expose the bank to legal, constitutional and financial risks.

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The report notes that the CBK recruited managers who did not fully meet the mandatory experience or service period requirements.

“There were instances during the recruitment processes where shortlisted or successful candidates did not fully meet the mandatory experience or service period requirements even though they were previously acting in the positions they were subsequently appointed to,” Gathungu said.

The report further revealed that the bank failed to involve the Salaries and Remuneration Commission (SRC) when setting salary structures and perks, a legal requirement.

“Non-adherence to internal human resources policies was noted in staff promotions, specifically concerning placement on salary scales and promotions to non-succeeding grades,” Gathungu added.

CBK was also faulted for mishandling staff secondments and temporary attachments to other State agencies. The breaches include failing to seek reimbursements for staff attached to other agencies and exceeding the allowed duration of secondments, creating confusion over staff employment status and legal compliance.

“The matters collectively present a risk of constitutional and legal breaches, potential financial losses due to unrecovered costs and weaknesses in the control environment governing human resources,” the Auditor General said.

Gathungu also notes that the central bank operated for over a year without a full board of directors, affecting the staffing of key committees, including the Human Capital Committee responsible for HR policy. Between December 2024 and May 2025, there were no non-executive board members, with five directors appointed by the President in May, leaving the board short of three members.

Committee members during the year ended June 30, 2025, included Nelius Kariuki (chairperson), Samson Cherutich, Rachel Dzombo and Ravi Ruparel, who all retired on December 4, 2024. Their successors, Beatrice Kosgei (chairperson), Abdullahi M. Abdi, Sophie Njeri Moturi, and David Simpson Osawa Owuor, were appointed on June 27, 2025.

As of May 2025, the CBK had 1,311 employees, with 455 staff aged between 51 and 60, about 34.7 per cent of the workforce, nearing retirement. The bank has been actively recruiting to fill gaps and strengthen human capital. However, the Auditor General said it struggles with inclusivity, as Kikuyu and Kalenjin communities account for 583 employees, or 44 per cent of the staff.

CBK is also among the highest-paying government agencies, with an average monthly salary of Sh349,605. Its payroll rose by 5.9 per cent to Sh5.5 billion in the year ended June 2025, up from Sh5.2 billion the previous year.

The HR breaches emerge as the CBK’s regulatory responsibilities expand to include oversight of banks, digital credit providers and the management of monetary policy.

Financially, the bank recovered from a Sh24.8 billion deficit in 2024 to post a surplus of Sh65.8 billion for the year ended June 2025. Despite this, it will not pay dividends to the Treasury, retaining the profit to increase its capital to Sh100 billion.

“This is the first time in seven years that the CBK will not remit dividends to the Treasury,” the report noted, highlighting that annual dividends over the past five years ranged between Sh2.5 billion and Sh30 billion.