The scam, which involves drawing the salaries of non-existent civil servants, is widespread, a BBC correspondent in Nigeria says.
But the government has recently been cracking down, removing thousands of "ghost workers" from its payroll.
Nigeria is Africa's biggest economy.
It is the continent's top oil producer, but its economy is currently under huge strain due to the recent collapse in oil prices.
The state has been able to save millions of dollars as a result of an ongoing verification of its workforce, the auditor general for Bauchi said.
Abubakar Gabi said that thousands of workers and pensioners did not appear for an exercise aimed at rooting out ghost workers and claimants.

The north Belfast derby could have a huge bearing on whether the Crues will retain the Irish Premiership crown.
The clash of two in-form sides is one of the biggest fixtures of the season.
Cliftonville have lost just one of the 19 league matches played since Lyttle took over in October while Crusaders have been beaten just once in 25 games.
"Cliftonville will come to Seaview and throw the kitchen sink at us," said Crusaders manager Stephen Baxter, who is without suspended striker Michael Carvill.
"We know that, and have to be prepared for it. We need to give back as much as we receive.
"It is a big match but there is a long way to go in this league.
"Our job is to concentrate on our own game and just get on with the task ahead of us."
Earlier in the campaign, Crusaders won 1-0 away to the Reds while the north Belfast rivals drew 2-2 at Seaview on Boxing Day.
"We have been on a good run for some time now," said Cliftonville manager Lyttle whose side beat Ards in last weekend's League Cup final.
"We had a wee blip with a number of draws but we have got things sorted out and are a team in form.
"Hopefully, we can drive on for the rest of the campaign."
Victory for Cliftonville would also be a boost to Linfield's ambitions of being the ones to deny Crusaders back-to-back titles.
David Healy's Blues, who lost 2-1 at Portadown last time out, go to Coleraine aiming to beat the Bannsiders for the third time this season.
"We had been on a nice little run before the Portadown game," said boss Healy.
"Portadown had been struggling but they have now taken six points from us. It shows how teams raise their game when they play Linfield.
"We must pick ourselves up and go on another unbeaten run."

Events company Sincura Group, which controversially removed another Banksy mural in Tottenham, said it would exhibit the work before selling it for about Â£500,000.
Director Tony Baxter said the mural on a printing shop in Great Eastern Street would be removed by Sunday.
"It's a very iconic piece," he added.
A man who works in the printing shop said in 12 years he had not seen the Banksy mural because it has been covered with boards.
"I've seen pictures of what this building was like with it on about 15 years ago. Everybody's curious," he said.
Mr Baxter said the mural had become damaged with paint peeling away and would be restored before it was sold.
An image of Girl and Balloon painted onto the cardboard backing of an Ikea frame sold for Â£73,250 in 2012.
Last week, a developer expected to buy a block of offices from Camden Council was told it must remove a Banksy stencil of a rat and return it to the authority before the sale.
In the last year, two London Banksy murals have been removed from buildings - an image of a boy hunched over a sewing machine in Wood Green and another showing two children playing with a "no ball games" sign in Tottenham.
A spokesman for Banksy declined to comment.
Children as young as eight are being paid teaching salaries by the state as part of identity fraud in the north-eastern Nigerian state of Bauchi, officials have found.
[NEXT_CONCEPT]
Gerard Lyttle takes his Cliftonville team to Crusaders on Saturday confident of a victory which would move them to within six points of the leaders.
[NEXT_CONCEPT]
A famed stencil image of a girl with a balloon by graffiti artist Banksy is being removed from the wall of an east London shop and sold.