County governments have poured millions of shillings into digital systems meant to seal revenue leakages and raise collections, but fresh audits show many of the expensive projects are yet to deliver the promised results.
Instead, counties continue to rely on manual processes, incomplete systems and weak controls, while private technology firms keep earning installation fees and commissions from the same platforms.
Reports by Auditor-General Nancy Gathungu and the Commission on Revenue Allocation (CRA), seen by the Nation, show that private financial technology firms are making millions of shillings through contracts to automate county revenue collection.
Apart from being paid to install the systems, the companies also receive commissions of between four and 15 per cent of the revenue collected through the platforms.
The audits, however, show that many county governments have not seen better revenue performance after investing heavily in the systems. In several cases, automation remains incomplete, some revenue streams are still handled manually and weak oversight has left room for losses. The findings also show that some counties are paying service providers millions even though revenue collections have shown little or no growth.
The reports reveal that many counties have only automated a small number of their revenue streams, leaving the rest outside the systems.
In Nakuru County, the Auditor-General's report for the year ended June 30, 2025, shows that the county entered into a contract on December 1, 2020, with a private company to install, configure and commission an Integrated Revenue Collection Management System at a cost of Sh34.5 million. Under the agreement, the company was also entitled to 4.3 per cent of the monthly revenue collected through the platform to help increase collections.
The audit, however, found that the investment had not translated into better revenue performance.
“During the year under review, the vendor was paid a total of Sh42.8 million, being 4.3 per cent of the total revenue collected per month for the period. This happened despite the fact that revenue collection remained stagnant,” the report says.
In Trans Nzoia County, auditors found that the county awarded a Sh27 million contract on December 21, 2023, for the delivery, development, installation, deployment, testing and maintenance of a fully automated County Revenue Collection and Debt Management System. The contract also carried an annual recurring cost of Sh7.8 million.
Despite the contractor receiving full payment, auditors established that the project had not been fully completed.
“Although the contract sum was fully paid to the vendor, modules such as Agricultural Cess, Royalties and Public Health had not been configured and automated in line with the contract agreement, hence the possibility of loss of revenue from the streams,” the report says, adding that delays in automating building plan approvals, building approval fees, house rent and land rates may have prevented the county from fully optimising revenue collection.
The audit further established that the system had not been linked to the Integrated Financial Management Information System (IFMIS). Revenue records were still being prepared manually, increasing the risk of manipulation and revenue leakages.
In Uasin Gishu County, auditors found that the county had already paid Sh43 million to a local company, representing about 90 per cent of the Sh47.8 million contract value, for the delivery, installation, testing and commissioning of an Integrated Revenue Management System. Even after the payment, the system remained incomplete and had not achieved its intended purpose.
Elgeyo-Marakwet County also spent millions on a County Revenue Management System that auditors found was still not fully operational. The county contracted a private company to design, deploy and operationalise the system at a cost of Sh27.8 million, payable in three phases.
By the time the audit was conducted, the county had paid Sh17.5 million, including Sh1.3 million representing four per cent of revenue collected between August 2024 and May 2025. Even so, auditors found the project remained incomplete, limiting the county government's ability to monitor revenue collection and reporting from hundreds of health facilities.
In Vihiga County, auditors found that payments to the contractor had reached 89 per cent of the Sh58.8 million contract for a Revenue Automation System. However, important parts of the project, including complete automation, system handover and integration with county systems and IFMIS, had not been completed.
The Auditor-General also established that the contractor continued to host the county's revenue data on its cloud infrastructure, leaving the county government without full control over the information.
“Despite the county spending millions in installation of the system, it remains incomplete, ineffective and exposed to revenue leakages because the county executive does not have full control of the revenue collection system,” the report states.
In Kisii County, auditors found that the company managing the Revenue Management System received Sh4.8 million in administrative costs from Sh89.8 million collected between January 26 and March 31, 2024.
However, records examined at the County Revenue Department showed that no revenue had been collected through the automated system during the same period. Auditors also found that major revenue streams, including land rates, had not been integrated into the platform.
In Nairobi City County, Gathungu questioned whether taxpayers were getting value for money from the Nairobi Pay revenue collection system.
According to the audit, although the county invested heavily in supporting infrastructure, it signed an agreement in December 2024 allowing a national government-linked vendor to run the platform and earn 4.5 per cent of all revenue collected.