Payroll Leakages and Education Financing: Evidence From Ekiti State’s 2020 Staff Verification Exercise

Payroll integrity is increasingly recognized as central to effective education financing, particularly in low- and middle-income countries where teacher salaries account for 70–80 percent of recurrent education expenditure. Yet payroll systems across Sub-Saharan Africa remain vulnerable to leakages, with ghost workers inflating wage bills and diverting scarce resources from the classroom. This study investigates the impact of payroll fraud on education financing in Ekiti State, Nigeria, with emphasis on the role of biometric audits in addressing systemic inefficiencies. Drawing on payroll verification reports, government audit documents, and secondary sources, the study quantifies the prevalence of ghost workers, estimates the fiscal savings achieved through biometric payroll cleansing, and models the opportunity cost of leakages in terms of forgone educational investments. It was revealed that in 2020, Ekiti State identified 362 ghost workers across local government payrolls, costing approximately ₦19.3 million per month or ₦231.6 million annually. While modest in absolute terms, these losses represented 3–4 percent of the state’s basic education wage bill. Biometric audits reduced the wage burden accordingly, yielding fiscal savings that could finance 214 additional teachers, 15 new classrooms, or more than 154,000 textbooks annually. These results underscore that payroll audits should not be seen merely as anti-corruption measures but as education financing reforms with direct implications for quality improvement. The study contributes to the literature by linking payroll integrity to opportunity costs in education and highlights the need for institutionalized audits, transparent reinvestment of savings, and stronger accountability frameworks. By strengthening payroll systems, states like Ekiti can expand fiscal space for education and move closer to achieving Sustainable Development Goal 4