Counties that receive the biggest allocations are not always the ones managing public money best, according to Kenya's first County Fiscal Performance Measurement Index, which places Embu at the top of the national rankings and leaves Nairobi City among the poorest performers despite controlling the country's largest county budget.
The first County Fiscal Performance Measurement Index (CFPMI), prepared by Parliament's Parliamentary Budget Office, paints a mixed picture of financial management across the 47 devolved units, showing that only three counties attained above-average performance while the rest continue to struggle to meet key public finance standards.
Embu led the rankings with a composite score of 0.689, followed by Narok and Wajir, the only counties to attain a Grade B. Kisumu was ranked last after posting a score of 0.285. None of the counties achieved Grade A, showing that even the strongest performers still fell short of the highest benchmark for fiscal management.
The assessment measured county performance using seven indicators drawn from the Constitution and the Public Finance Management Act. They included budget implementation, development spending, own-source revenue collection, expenditure on salaries and benefits, pending bills, county assembly expenditure ceilings and audit outcomes.
The findings were compiled using data from the Controller of Budget, the Office of the Auditor-General and the Kenya National Bureau of Statistics.
Launching the report on Thursday, Senate Speaker Amason Kingi said the new index provides the Senate with a reliable way of evaluating how counties manage public resources.
He said that while the Senate has always been responsible for determining how nationally collected revenue is shared among counties, it has lacked “a scientific and objective framework” for assessing whether the funds are being used prudently.
“It will enable the House to benchmark counties using verifiable indicators, not to shame them, but to identify best practices, expose weaknesses and determine whether public resources are translating into meaningful development for wananchi,” he said.
Each county was assigned a composite score ranging from zero to one before being graded from A for excellent performance to E for poor performance.
The report shows that some counties have remained among the weakest performers over two consecutive financial years. Nairobi City, Kisumu, Kajiado and Kisii all appeared in the bottom 10 in both the 2023/24 and 2024/25 financial years, pointing to continued shortcomings in budget discipline and financial management.
Nairobi remained among the country's poorest performers despite controlling the biggest county budget of about Sh43.1 billion. Kisumu also remained in the lowest group.
Meanwhile, Nyandarua, Laikipia, Nyamira, Machakos and Mombasa improved enough in the latest financial year to move out of the bottom 10.
The report further shows that larger budgets do not automatically result in better financial performance. While Nairobi struggled with budget implementation, Kericho, which operated with an approved budget of about Sh9.8 billion, emerged as the country's best performer in budget execution.
Nakuru, with an approved budget of Sh25.3 billion, Turkana at Sh16.8 billion and Kisumu at Sh15.3 billion were also listed among the weakest performers in budget implementation.
According to the report, the results show that careful planning and effective execution play a greater role in financial performance than the amount of money available.
Senate Clerk Jeremiah Nyegenye said the index responds to growing calls from Kenyans for greater accountability in county spending.
“Kenyans don’t just want to know how much money was sent to counties. They want to know: Did it build the dispensary? Did it buy the drugs? Did it pay the ECDE teacher? The CFPMI is our answer,” he said.
The report also highlights a continued decline in county spending on development projects as more resources are directed towards recurrent expenditure.
Average development expenditure performance dropped from 0.447 in the 2023/24 financial year to 0.373 in 2024/25. More than half of the counties failed to meet the legal requirement of allocating at least 30 per cent of their budgets to development, according to the Parliamentary Budget Office.
Kwale posted the strongest performance in development spending with a perfect score of 1.000. Embu followed with 0.916, ahead of Kericho (0.849), Mandera (0.815) and Siaya (0.814), all earning Grade A for consistently exceeding the minimum legal allocation for development.
Turkana ranked last in this category with a score of 0.000, followed by Kisumu (0.059), Nyeri (0.087), Garissa (0.107) and Vihiga (0.127).
Performance in own-source revenue remained uneven across counties. Narok led the country with a perfect score of 1.000, followed by Nairobi City (0.981), Mombasa (0.918), Kiambu (0.910) and Kajiado (0.907), reflecting stronger local revenue mobilisation.
Kisumu posted the weakest score of 0.068, followed by Kakamega (0.106), Homa Bay (0.116), Baringo (0.172) and Lamu (0.193).
Although the report records a slight national improvement in own-source revenue collection, it notes that the number of counties in the poorest-performing category increased from four to five. Nyandarua was among the biggest improvers after moving from Grade E to Grade C following reforms in revenue collection.
The assessment also found that several counties continue to spend a large share of their revenue on salaries and employee benefits.
Nyeri ranked last in wage bill management with a score of 0.215. It was followed by Nairobi City (0.237), Baringo (0.242), Bomet (0.251), Homa Bay (0.257), Kisii (0.268), Kisumu (0.272), Laikipia (0.282), Elgeyo Marakwet (0.287) and Nyamira (0.289).
Embu recorded the strongest performance after attaining a perfect score of 1.000 by keeping its personnel expenditure within the legal ceiling of 35 per cent of total revenue.
Nakuru, Narok, Kilifi and Tana River completed the top five counties in wage bill management, while the Parliamentary Budget Office warned that the poorest performers recorded wage-to-revenue ratios ranging between 47.13 per cent and 57.01 per cent, leaving fewer resources for development and public services.
Overall, Embu, Narok, Wajir, Kitui, Kilifi and Tana River consistently ranked highly across several fiscal indicators, including budget implementation, development expenditure, wage bill management, audit outcomes and expenditure controls.
On the other hand, Kisumu, Kakamega, Busia, Bomet, Nairobi City, Baringo, Lamu, Kajiado and Bungoma repeatedly recorded weak results across multiple indicators, including revenue collection, pending bills, wage bill management, development spending and audit outcomes.
The report concludes that the difference between the best and weakest-performing counties is not determined by the size of their budgets, but by sound planning, fiscal discipline, governance and effective management of public resources.