Kisumu County is collecting only about two-thirds of its own-source revenue target despite having the capacity to generate up to KSh 3.6 billion annually, according to a new report by the County Assembly.
The report highlights serious weaknesses in governance, financial oversight and technology management that have contributed to revenue losses and persistent budget shortfalls.
An Ad-Hoc Committee appointed by the County Assembly found that revenue collections have remained at around 65% of annual targets, leaving a gap of more than KSh 1.2 billion each year.
“The County’s revenue challenge is not a lack of economic potential but a failure of governance, controls, accountability and systems management,” the committee said in its report released in May 2026.
The investigation identified several problems, including cash collections made outside official systems, continued use of manual receipts, weak supervision of revenue officers, poor reconciliation procedures and inadequate audit controls.
The committee said there is evidence that significant amounts of revenue may not be reaching official county accounts.
While businesses and residents continue to pay county fees and charges, the report suggests that some collections are being diverted before they are recorded in the county’s financial systems.
The report also raises concerns about the county’s heavy reliance on its Integrated Revenue Management System (IRMS), the digital platform used to collect revenue.
A four-day system outage in February 2026 caused daily collections to fall by 74%, exposing what the committee described as a major operational risk.
“This exposes the County to significant operational risk,” the report noted.
The committee also questioned the county’s contract with telecommunications company Safaricom and technology provider RevTech.
Among the concerns were an uncapped 4% commission on all revenue collected, limited performance guarantees and the absence of penalties for prolonged system failures.
The report described the arrangement as financially unfavourable and lacking sufficient safeguards to protect public funds.
Independent ICT audits conducted during the inquiry reportedly found untraceable transactions, missing payment records, unreceipted collections and test data within the live revenue system.
Auditors also raised concerns about excessive administrator access that could allow revenue records to be altered.
As a result, the committee concluded that the current system cannot be fully relied upon as an accurate record of all county revenue transactions.
The report further found that the County Revenue Board has effectively been inactive since its members were directed to step aside in December 2024.
Investigations into the board members were never concluded and no disciplinary outcomes were communicated, leaving the board unable to perform its statutory functions.
In its place, a technical committee reportedly took over some responsibilities without clear legal authority.
“This created a governance vacuum at the centre of revenue administration,” the report said.
The findings are expected to increase pressure on the County Treasury, the Finance Department, the County Secretary’s office and legal advisers over alleged failures in oversight and contract management.
Despite the challenges, the committee says Kisumu has the potential to significantly increase revenue collection if reforms are implemented.
Its recommendations include the immediate reconstitution of the Revenue Board, a forensic audit of all revenue transactions, restoration of reconciliation controls and investigations into suspected leakages.
The committee also wants the county to renegotiate the IRMS contract, strengthen ICT governance, automate all revenue streams and modernise property valuation systems.
Leave a comment