The Controller of Budget has raised concerns over Kisii County’s budget implementation during the first nine months of the 2025/26 financial year, citing weak own-source revenue collection, low development expenditure, mounting pending bills, and an unsustainably high wage bill.
According to Controller of Budget Margaret Nyakang’o’s Budget Implementation Review Report for the period ending March 31, 2026, the county collected only Sh352.49 million in own-source revenue against an annual target of Sh1.47 billion, achieving just 24 percent of its projected revenue.
The report indicates that the poor revenue performance constrained budget implementation and financing of county programmes, urging the county government to strengthen revenue mobilisation and align spending with available resources.
“The County should address its own-source revenue performance to ensure the approved budget is fully financed. Appropriate austerity measures should be implemented to ensure expenditure commitments are aligned with available revenue,” Nyakang’o said.
The report further shows that Kisii County spent Sh2.36 billion on development programmes during the review period, more than double the Sh1.16 billion spent during a similar period in the previous financial year. Despite the increase, the expenditure translated into a development absorption rate of only 27 percent.
The Controller attributed the low absorption rate to delays caused by confusion between the Integrated Financial Management Information System (IFMIS) and the Electronic Government Procurement (e-GP) system, which slowed budget implementation.
The report also reveals that the county had outstanding trade payables amounting to Sh591.05 million as of March 31, 2026. Additionally, the County Treasury failed to adhere to its own trade payables payment plan despite committing to clear pending obligations during the financial year.
Nyakang’o called on the county leadership to prioritise the settlement of genuine pending bills.
“The County leadership should address the situation of trade payables to ensure that genuine bills are paid promptly within the remaining financial year. Further, compliance with the Trade Payables Action Plan should be enforced,” she said.
The report also highlights concerns over the county’s wage bill, noting that expenditure on employee compensation stood at Sh4.84 billion, representing 43 percent of the county’s total revenue — well above the 35 percent ceiling provided under the Public Finance Management (County Governments) Regulations, 2015.
“The Controller of Budget recommends that county governments maintain employee compensation expenditure at sustainable levels and comply with Regulation 25(1)(b) of the Public Finance Management (County Governments) Regulations, 2015.”
The Controller further flagged the continued use of a manual payroll system by the County Assembly, where personnel emoluments amounting to Sh14.79 million for new employees, including salary arrears, were processed outside the government’s Human Resource Information System (HRIS).
She urged the county to expedite migration to the automated payroll system and strengthen human resource management.
“The Government requires that salaries be processed through the HRIS system, and the County is advised to fast-track the acquisition of Unified Personnel Numbers for its staff. The County Public Service Board should regulate staff engagement on contract and casual terms as provided under Section 74 of the County Governments Act, 2012. Furthermore, strict adherence to the approved staff establishment should be maintained,” she said.
The report also points out that the county’s Bursary Fund had exceeded the legally prescribed lifespan under the Public Finance Management Regulations, making it ineligible for further withdrawals unless its legal status is renewed.
Nyakang’o urged the county to regularise the fund to avoid disruptions in service delivery.
“The County should ensure timely review and extension of public funds whose lifespans are nearing expiration or have lapsed to prevent operational disruptions. Additionally, any expenditure from lapsed funds should cease immediately, and legal mechanisms should be followed to re-establish or wind up such funds in compliance with the Public Finance Management Act,” she said.
The report further reveals that Kisii County had uncollected own-source revenue receivables amounting to Sh621.78 million as of March 31, 2026, further weakening its revenue position.
Nyakang’o called for urgent measures to improve revenue collection.
“The Controller of Budget recommends that the County Government institute measures to collect trade receivables in order to meet set revenue targets and expenditures as provided in the budget,” she said.
Despite the challenges, the report notes that some programmes posted strong implementation performance. Village Roads Services under the Department of Roads and Public Works recorded a development budget implementation rate of 105 percent, while the Purchase of Machinery programme achieved 94 percent. On the recurrent side, ECDE Services attained a 100 percent absorption rate.
However, several programmes, including Veterinary Services, Fisheries, Housing Management, Trade and Investment Promotion, and Devolved Services, recorded negligible or no budget absorption during the review period, largely due to procurement delays associated with the transition between IFMIS and the Electronic Government Procurement system.
The Controller of Budget has urged Kisii County to strengthen financial management, enhance revenue mobilisation, accelerate implementation of development projects, clear pending bills, and ensure full compliance with public finance laws to improve service delivery and safeguard prudent management of public resources.