A review by the National Treasury has revealed that many county governments are exposing public funds to risk by relying on external vendors for revenue collection instead of managing their own digital platforms.
The 2025 Budget Review and Outlook Paper (BROP) highlights that a majority of counties still operate with third-party systems that are neither integrated nor fully controlled by local authorities, leaving them vulnerable to errors, manipulation, and losses.
“Most counties do not own the revenue management systems, exposing them to data breaches and losses during transitions,” the Treasury stated in its assessment of the 2024/2025 county budget execution.
The Treasury report underscores that such dependency undermines accountability and financial efficiency, making it difficult for counties to achieve self-sufficiency through own-source revenue.
Despite setting ambitious collection targets, many counties continue to fall short, relying heavily on national government transfers to fund their operations.
Records from the Office of the Controller of Budget indicate that counties collected only Sh67.3 billion of their Sh87.67 billion own-source revenue target in the year ending June 2025, leaving a shortfall of 23 per cent.
The report adds that unregulated third-party systems limit monitoring and control, allowing county officials in some cases to collect and spend revenue at source without proper scrutiny. Allegations have also emerged of collusion between vendors and officials to manipulate records, further endangering public funds.
When counties lack ownership of their revenue platforms, transitions between vendors or disputes over data compromise oversight and continuity. To address this, the government plans to roll out a unified platform to track county collections in real time, improve transparency, and ensure all revenue is directly credited to county accounts.
KRA Commissioner General Humphrey Wattanga previously told the Senate ICT Committee that the absence of standardised collection processes has negatively affected county earnings.
“Additionally, vendors usually charge a percentage of revenue collected, which in some cases is unreasonably high,” Wattanga said, noting that unclear technical requirements and vendor-influenced procurement processes have worsened the problem.
While counties such as Nairobi, Mombasa, and Kisumu have started integrating digital systems, most still use semi-digital or manual collection methods prone to inefficiency and fraud. The Treasury further blamed weak ICT enforcement and limited technical know-how for the slow adoption of compliant systems.
Some platforms in use fail to adhere to the Public Finance Management Act and the Data Protection Act, which safeguard citizen information and ensure accountability in financial dealings.
