By TWV Team
The Controller of Budget’s latest County Budget Implementation Review Report, which examines the first nine months of the 2024/25 financial year (from 1 July 2024 to 31 March 2025), uncovers widespread financial irregularities within several county governments across Kenya.
According to the report, counties raised only Kshs. 10.2 billion in own-source revenue, just 50 per cent of the annual target of Kshs. 20.41 billion. This persistent underperformance raises serious concerns about the realism of revenue projections, particularly given historical collection trends. Unrealistic targets undermine the credibility of county budgets and contribute to a growing stockpile of pending bills.
The report highlights non-compliance in the management of public funds. In violation of the Public Finance Management (PFM) Act, unspent funds from the 2023/24 financial year were not returned to the County Revenue Fund (CRF). Consequently, some departments reported expenditures exceeding the amounts approved by the National Treasury.
As of March 2025, pending bills across counties totalled Kshs. 115.69 billion. County treasuries have also failed to honour agreed payment plans for settling these obligations. A particularly troubling finding is the continued use of manual payroll systems. Payments totalling Kshs. 629.63 million, equivalent to 4.9 per cent of total personnel emoluments, were processed manually. The CoB warned that manual payrolls are prone to abuse and expose public funds to misappropriation due to weak internal controls.
Several counties also continue to operate commercial bank accounts, despite legal requirements to maintain such accounts exclusively at the Central Bank of Kenya. These accounts, held by health facilities, vocational training centres, special funds, and Early Childhood Development (ECD) programmes, contravene Regulation 82(1)(b) of the PFM (County Governments) Regulations, 2015.
The Controller of Budget has issued recommendations to address these governance and compliance failures. County governments are urged to:
- Submit timely financial reports to the CoB, as required by law.
- Return unutilised funds to the CRF, in accordance with Section 136 of the PFM Act, 2012.
- Transition all payroll processes to the government-mandated Human Resource Information System (HRIS).
- Accelerate the issuance of Unified Personnel Numbers (UPNs) to all staff.
- Regularise the employment of contract and casual staff through the County Public Service Board, in line with Section 74 of the County Governments Act, 2012.
The CoB also reminded counties that failure to provide required financial information constitutes an offence under Section 16 of the Controller of Budget Act, 2016.
With public trust and fiscal sustainability at stake, the report underscores the urgent need for accountability and reform in county financial management. Whether counties will act decisively remains to be seen.
