Understanding Kisumu County’s Budget Implementation Report
The Analysis of the Office of the Controller of Budget’s Kisumu County Government’s Budget Implementation Review Report for the 1st Half of FY 2024/25 provides a comprehensive look into how public funds were collected, allocated, and spent in the first six months of the 2024/25 financial year (July–December 2024).
This report highlights revenue performance, expenditure trends, and financial challenges affecting the county’s service delivery and development initiatives.
Overview of the County’s Budget
- Total County Budget: Kshs. 15.3 billion
- Recurrent Budget: Kshs. 10.27 billion
- Development Budget: Kshs. 5.03 billion
- Total Expenditure (July–December 2024):Kshs. 3.99 billion
- Recurrent Spending: Kshs. 3.68 billion
- Development Spending: Kshs. 302.84 million
With development spending significantly lower than recurrent expenditure, concerns arise about whether enough resources are being directed toward infrastructure, healthcare, and economic growth.
Revenue Performance
In the first half of FY 2024/25, Kisumu County had Kshs. 5.52 billion to fund both development and recurrent activities.
Revenue Breakdown:
- Equitable Share from National Revenue: Kshs. 4.16 billion
- Additional Government & Development Partner Allocations: Kshs. 13.93 million
- Own Source Revenue (OSR) Collection: Kshs. 670.52 million
- Cash Balance from FY 2023/24: Kshs. 669.46 million
Own Source Revenue (OSR) Breakdown (Kshs. 670.52M):
- Facilities Improvement Financing (FIF) from Health Services: Kshs. 444.83 million (66%)
- Bus Park Fees: Kshs. 53.47 million (8%)
- Outdoor Advertising: Kshs. 39 million (6%)
- Land Rates: Kshs. 36.7 million (5%)
- Market Fees: Kshs. 29.8 million (4%)
- Trade License Fees: Kshs. 17.97 million (3%)
- Other Sources: 8%
Revenue Performance Compared to Other Counties
Kisumu County ranks among the lowest nationally in revenue collection and budget utilization:
- Local revenue collection (first six months vs. annual target): 18%, Rank: 45/47 counties
- Overall budget absorption rate: 26%, Rank: 41/47 counties
- Absorption of approved development budget: 6%, Rank: 40/47 counties
Despite having revenue streams available, collection inefficiencies and poor budget absorption continue to hinder service delivery and economic development.
Expenditure Analysis
Travel Expenses: A Major Cost
One of the most notable expenditures is high travel spending, with Kisumu County allocating Kshs. 196.11 million to travel in just six months.
Breakdown of Travel Expenses:
- Domestic Travel:Kshs. 173.33 million
- County Assembly: Kshs. 75.75 million
- County Executive: Kshs. 97.58 million
- Foreign Travel:Kshs. 22.78 million
- County Assembly: Kshs. 11.32 million
- County Executive: Kshs. 11.46 million
Notable Foreign Trips:
- USA Summit: Kshs. 2.76 million (Two executives attended).
- Dubai Conference: Kshs. 994,900 (Five county assembly members attended).
- Benchmarking Tours: Conducted in Uganda, Mauritania, and Egypt, with individual costs ranging between Kshs. 286,300 – Kshs. 772,200.
With limited resources and service delivery gaps, such travel expenses raise questions about whether these trips provide tangible benefits to the county.
Healthcare Spending: Funds Available, But Underutilized
The county collected Kshs. 444.83 million in healthcare revenue, reaching 48% of its annual target (Kshs. 926.12 million). However, low fund absorption in hospitals has hindered service delivery.
Hospital Budget Utilization:
- Jaramogi Oginga Odinga Teaching and Referral Hospital (JOOTRH)
- Budget: Kshs. 650 million
- Utilization: 32%
- Lumumba Sub-County Hospital
- Utilization: 50% (Highest among county health facilities).
- Kisumu County Referral Hospital
- Spent Kshs. 38.69 million (Utilization: 32%).
Despite available funds, inefficient budget absorption is limiting improvements in healthcare services.
Development Projects: A Slowdown in Growth
Development spending declined by 25%, dropping from Kshs. 401.63 million in the previous year to Kshs. 302.84 million.
Key Development Projects and Their Status:
| Project | Budget (Kshs.) | Completion Status |
|---|---|---|
| Non-Motorized Transport Facility Phase II (Kisumu Central) | Kshs. 659.07M |  100% Complete |
| Governor’s Official Residence | Kshs. 48.48M |  33% Complete |
| Pap Konam Agriculture Centre (Seme) | Kshs. 14.38M | 100% Complete |
| Nyakach Water Project Expansion | Kshs. 13.87M | 100% Complete |
| Chemilil Health Centre Rehabilitation | Kshs. 3.89M | 100% Complete |
With low development spending, the county risks delaying crucial infrastructure improvements.
Challenges and Recommendations
Key Challenges:
- Low development budget absorption, slowing down infrastructure projects.
- Excessive spending on travel, diverting funds from essential services.
- Over-reliance on recurrent expenditure, particularly administrative costs.
- Revenue collection inefficiencies, affecting financial sustainability.
Recommendations:
- Reduce unnecessary travel expenses and redirect funds to essential services.
- Increase budget absorption rates in development projects to enhance infrastructure.
- Strengthen revenue collection efforts to meet financial targets.
- Ensure funds meant for public services are fully utilized for healthcare, education, and economic growth.