Nyongo in the spot as Controller of Budget pushes counties to seal revenue leakages

Kisumu Governor Prof.Peter Anyang' Nyong'o during an interview in Nairobi on August 13, 2026.[Boniface Okendo, Standard]

The Office of the Controller of Budget has called on counties to tighten their revenue collection systems and plug loopholes that could expose public funds to leakages as it steps up scrutiny of how devolved resources are collected and spent.

Controller of Budget Dr Margaret Nyakang’o said county revenue systems need to be integrated with accounting systems to strengthen controls and minimise the risk of funds being lost, as her office began a 10-day monitoring and evaluation exercise in Kisumu County.

Speaking to journalists in Kisumu on Friday, Dr Nyakang’o said the exercise was part of the office’s annual monitoring and evaluation programme, during which her team visits counties and county assemblies to understand challenges affecting budget implementation and verify issues raised in its quarterly budget implementation reports.

“We are here for our annual monitoring and evaluation exercise during which we visit the counties and the county assemblies to understand their problems and also to ground-truth some of the issues that have been reported in my quarterly report, the budget implementation report,” she said.

The Controller of Budget said her team would examine concerns surrounding Kisumu’s integrated revenue system, including whether weaknesses in the system may have resulted in loss of county revenue.

Asked about claims that Sh40 million had been lost through the system, Dr Nyakang’o said her office had not established that any money had been lost, noting that the monitoring exercise had just started.

“As at this point, we have not established as Office of the Controller of Budget if any money has been lost. But the exercise has just started and we’ll be finding out if indeed revenue was lost,” she said.

She, however, said the revenue system should be integrated with the county’s accounting system to strengthen accountability and minimise possible leakages.

“But the recommendation in terms of the revenue system is that it needs to be integrated with the accounting system so that the risk of leakage is minimized,” Dr Nyakang’o said.

The 10-day exercise, which runs from September 14 to 25, 2026, will assess how funds released to Kisumu County during the 2025/26 financial year were utilised and whether recommendations arising from previous monitoring exercises have been implemented.

According to a letter seen by Standard dated August 31, 2026, and addressed to Governor Peter Anyang’ Nyong’o, the exercise will focus on several thematic areas, including the utilisation of Operations and Maintenance funds.

The Controller of Budget’s office will specifically scrutinise exchequer releases amounting to Sh428.69 million for medical insurance, Sh269.86 million for domestic travel, Sh229.43 million for the Kisumu County Bursary Fund and Sh114.50 million for legal dues and fees.

The team will compare approved exchequer requisitions with actual expenditure and payments made during the first nine months of the 2025/26 financial year.

The office will also examine the settlement of pending bills by comparing the payment plan submitted by the county with actual payments eventually made and establishing whether payments followed the prioritisation contained in the plan.

Dr Nyakang’o said counties have a responsibility to maintain an orderly system for identifying and settling pending bills to ensure payments are made against verified obligations.

Through the Intergovernmental Budget and Economic Council (IBEC), she said, a set of standard documents had been approved, including the pending bills universe, which contains a schedule of all county payables.

“Once those have been declared, the county is supposed to prepare a pending bills settlement plan, a payment plan, which is then sent to my office. And every time requisitions for payment are made, we confirm that they are already reflected in that pending bills settlement plan,” she said.

She said the system would help counties reduce pending bills over time while ensuring payments are made in an orderly manner.

Dr Nyakang’o also said the National Treasury’s Integrated Financial Management Information System (IFMIS) department was integrating requisitions from her office with IFMIS to prevent approved payment requests from being substituted with others when counties make payments.

“This process is at the tail end, and we believe that in the course of this financial year, it will be in operation,” she said.

The monitoring exercise will further assess the establishment and operationalisation of the County Assembly Fund and verify whether withdrawals authorised for County Assembly expenditure were utilised for their intended purposes.

It will also review the implementation of recommendations from previous monitoring and evaluation exercises, as well as observations and recommendations contained in the first nine months’ County Budget Implementation Review Report.

Kisumu Deputy Governor Dr Mathews Owili, who received Dr Nyakang’o and her team, said the exercise would help the county understand areas that require improvement in its budget implementation systems.

“This was a day that me and the team here are receiving the Controller of Budget in Kisumu for an exercise that will go on, I think, for the next 10 days. As she has told you, they are on a mission to monitor and evaluate our system or what we do here in relation to our budget,” Dr Owili said.

He described the meeting as the official opening of the exercise, with an exit meeting expected when the monitoring process is completed.

Dr Owili said the engagement between the county and the Controller of Budget’s office was aimed at improving accountability and service delivery to the people of Kisumu.

The exercise also comes amid concerns over discrepancies in figures contained in budget implementation reports, with Dr Nyakang’o saying errors should be identified and corrected before data is submitted to the headquarters for compilation.

Asked what action would be taken to correct a reported discrepancy involving about Sh300 million attributed to the County Assembly, Dr Nyakang’o said figures should first be scrutinised and agreed upon at the county level.

“I’ve not seen where the actual mistake was, but as a way forward, I have suggested that before the figures leave the county level, they should be thoroughly scrutinised and agreed with the budget coordinator from the Office of the Controller of the Budget so that when the figures come for compilation at their office, they are correct,” she said.

She said the process should not wait until figures have already been included in a report and published online before discrepancies are detected.

“We should not wait until the figures have gone to the main report and have been posted online for us to realise that there was a mistake. That should have been realised before the data left the county,” she said.

Dr Nyakang’o said her officers would ensure that data is cleaned and verified before being submitted to the headquarters for compilation.

On delayed salaries, she said Kisumu County’s budget had been submitted late despite funds being available in its account.

“The funds were actually in the account, but the budget had not been submitted. So you cannot pay salaries without a budget,” she said.

She said that with the budget now in place, the payments would be made, adding that future county budgets should be submitted within the timelines provided by law.

“That budget should have been in my office in very early July, not in September,” she said.

The Office of the Controller of Budget is established under Article 228 of the Constitution to oversee implementation of national and county government budgets by authorising withdrawals from public funds when satisfied that such withdrawals are permitted by law. Under the Controller of Budget Act, the office is also mandated to monitor, evaluate, report and make recommendations to national and county governments on measures to improve budget implementation.