Kenya’s budget implementation continues to face serious gaps, with government entities failing to fully follow approved spending plans and repeatedly shifting funds between activities, Controller of Budget Margaret Nyakang’o has said.
Nyakang’o said weaknesses in expenditure controls, lower-than-expected revenue collection and reallocations made during the financial year were making it harder for the government to keep spending within the limits approved in the budget.
Her concerns come as Kenya seeks to reduce its fiscal deficit while funding a budget worth trillions of shillings. In the 2025/26 financial year, Treasury projected total revenue, including Appropriations-in-Aid, at Sh3.32 trillion against expenditure and net lending of Sh4.27 trillion, resulting in a projected fiscal deficit of Sh901 billion, equivalent to 4.7% of GDP.
Speaking during an interview on Citizen TV on Thursday night, Nyakang’o explained that her office tracks how government entities use public funds through quarterly reports that compare actual spending with the allocations and programmes set out in approved budgets.
“The process of ensuring that this has been done is through a quarterly reporting system. So what my office does is that after approving the withdrawals every three months, I get back to the spending entities and ask them to make returns of what they have done. Then I compare the way they have executed their budget with what they promised in the original budget,” she said.
The Office of the Controller of Budget uses the reports to assess how ministries, departments and government agencies are performing against their annual targets and objectives contained in the Budget Policy Statement.
The reviews also point out challenges affecting implementation and make recommendations to the spending entities. Nyakang’o said these findings are meant to alert government departments early enough when they begin moving away from their approved plans.
“If there are any discrepancies, they come in my quarterly report. Those are the observations that you are always reading. And they are supposed to act as the early warning system in case the budget implementers are off track; then they can use that report to get back on track. And that's why it's done quarterly,” she maintained.
However, she said government entities do not always act on all the recommendations issued by her office, with some only addressing selected issues.
“Simply not complying because they might correct a few aspects of my recommendations but not all,” Nyakang’o said.
Travel expenditure was among the areas she identified as continuing to raise concerns, despite spending warnings issued at the start of the financial year.
Nyakang’o also questioned the cost at which some government activities are carried out, saying expenditure can rise when programmes are implemented more expensively than necessary.
“I do know that the expenditure is exaggerated. We do things more extravagantly than we should. So we end up okay doing the right things but at a cost much higher than what we really should be using,” she stressed.
She further pointed to reallocations during the financial year, saying funds approved for one activity can later be moved to another, including domestic travel.
“There are a lot of reallocations in the course of the year. Other than seeking additional funding, we also do reallocations. So you will find that monies that were originally meant to buy books, you know, do something else, I may not tell you exactly what, is reallocated to travel, to domestic travel. And that's what happens both at the headquarters and at the counties,” she said.
According to Nyakang’o, supplementary budgets offer a way of formally regularising some of the changes made after the original budget has been approved. However, she said these changes may not attract the same level of scrutiny as the initial budget.
She also linked Kenya’s fiscal deficit to two main issues: the government collecting less revenue than it had planned and spending more than the limits set in the budget.
“We have not collected as much revenue as we planned to collect and two, we have not kept to the spending limits that we promised in the budget,” she said.
Treasury has also identified revenue mobilisation and control of expenditure as key areas in its efforts to manage the country’s fiscal position, with the government continuing to project a deficit that requires both domestic and external financing.
Nyakang’o said her office’s annual review of the 2025/26 financial year brings together the findings gathered through budget monitoring during the year.
The review examines revenue received and expenditure incurred by government entities against the plans and allocations approved for the financial year.
The latest National Government Budget Implementation Review Report for the 2025/26 financial year was released by the Office of the Controller of Budget in September 2026.