County billions: Tracking the journey from allocation to service delivery

NAIROBI, Kenya, Sep 28 — Every year, billions of shillings flow from the national government to Kenya’s forty-seven counties, supplemented by money raised locally.

The funds are meant to pay doctors and nurses, maintain roads, provide water, support farmers, run markets and deliver other services assigned to counties under the Constitution.

But between the moment money is allocated and the moment a resident sees a completed road, a stocked hospital or a functioning water system lies a complicated chain of budgets, transfers, procurement, salaries and implementation decisions.

So, where does your county’s money actually go?

The money starts in Nairobi — but not all of it

For the 2025/26 financial year, counties were allocated Sh415 billion as equitable share of revenue raised nationally. The figure is contained in the enacted Division of Revenue Act, making it the baseline transfer available to counties from nationally raised revenue.

That is not, however, the entire pool of money available to county governments.

The 2025/26 county budgets also incorporated additional conditional allocations from the national government and development partners, alongside money counties expected to raise themselves.

The Controller of Budget’s first-quarter review put the combined approved county budgets at Sh603.72 billion.

Of this, Sh217.80 billion, or 36 per cent, was budgeted for development while Sh385.92 billion, or 64 per cent, was for recurrent expenditure.

The counties expected to finance those budgets through the Sh415 billion equitable share, Sh93.89 billion in own-source revenue, Sh68.21 billion in additional conditional allocations and Sh26.62 billion in unspent funds carried forward from the previous financial year.

But an allocation in a budget is not the same thing as cash already sitting in a county account.

Why counties receive different amounts

The Sh415 billion is not divided equally among the 47 counties.

The fourth revenue-sharing basis, covering 2025/26 to 2029/30, assigns 42 per cent to population, 22 per cent to an equal-share component, 14 per cent to poverty, 13 per cent to income distance and 9 per cent to geographical size.

Population receives the largest weight because many county responsibilities are directly related to the number of people requiring services.

But geography also matters. A large county such as Turkana or Marsabit faces different costs of reaching residents spread across vast distances than a densely populated urban county.

The equal-share component, meanwhile, ensures every county has a basic allocation for functions that all counties must perform regardless of population size.

The formula therefore attempts to balance population, basic administrative needs, poverty, geography and economic disparities rather than simply rewarding counties with larger populations.

Once the money arrives, salaries take a large bite

This is where the distinction between recurrent and development spending becomes important.

Recurrent expenditure pays for the day-to-day running of government – salaries, allowances, utilities, supplies, operations and maintenance.

Development expenditure finances projects intended to create or improve infrastructure and other assets.

For 2025/26, counties collectively budgeted 64 per cent for recurrent expenditure and 36 per cent for development, putting the development allocation above the statutory minimum of 30 per cent.

But the recurrent side includes the people who deliver many of the services residents expect.

A county hospital cannot operate without doctors, nurses, clinical officers, laboratory staff and support workers.

Agricultural programmes require extension officers. Roads and public works require engineers and technical personnel.

The debate, therefore, is not simply whether counties spend money on employees.

It is whether the balance between personnel costs, operations and development leaves enough money to improve services and infrastructure.

Turkana County offers a useful illustration. Its 2025/26 budget of Sh17.56 billion allocated Sh11.12 billion, or 63.34 per cent, to recurrent expenditure and Sh6.44 billion, or 36.66 per cent, to development.

The county also budgeted Sh5.81 billion for personnel emoluments, equivalent to about a third of the total budget.

That means a resident looking at Turkana’s development budget should not assume that the entire Sh17.56 billion is available for new roads, water projects, health facilities or other visible investments.

Health: where the budget meets the citizen

For many citizens, the most visible test of a county budget is the local health facility.

County governments are responsible for county health services, including county hospitals, health Centres and dispensaries.

CRA analysis of historical county spending found that counties, on average, allocated 25.3 per cent of their resources to health and 8 per cent to agriculture, rural and urban development.

But the Commission makes an important distinction: revenue-sharing formulas determine how money is distributed between counties; they do not dictate exactly how each county must spend its entire equitable share.

That means two counties receiving similar amounts can make very different spending decisions.

Makueni provides an example of how a budget line can be followed to a specific health facility. In its 2025/26 budget, Sh2.11 million was set aside for construction and equipping of a laboratory at Kathonzweni Health Centre.

By December 31, 2025, the county had spent Sh1.96 million, representing 93 per cent absorption, and the project was recorded as complete.

The example shows the difference between a county-wide health allocation and an individual project that can be traced through a budget and implementation report: the allocation identifies what was intended, while the expenditure and project-status records show what had actually been done.

Your county also collects money from you

Counties do not depend entirely on Nairobi.

They are legally permitted to raise own-source revenue through charges such as parking fees, business permits, property rates, market fees and other authorized levies.

For 2025/26, counties collectively expected to raise Sh93.89 billion from their own sources, including Facility Improvement Financing and other receipts.

But the ability to budget for revenue is not the same as collecting it.

In the first half of 2025/26, counties collected only Sh26.94 billion, equivalent to 27 per cent of the annual own-source revenue target of Sh99.73 billion, according to the Controller of Budget’s review.

That gap has consequences.

Baringo County, for example, collected Sh462.99 million in own-source revenue in 2024/25 against a target of Sh600.10 million, achieving 77 per cent of the target.

Its latest fiscal planning document attributes the underperformance to weaknesses including a narrow revenue base, weak enforcement, inadequate automation and leakages in markets. The county also notes that revenue performance affects its fiscal capacity and service delivery.

When projected local revenue does not materialize, counties have less cash available for planned programmes and may struggle to settle bills or implement projects at the pace anticipated in their budgets.

The biggest gap can be between the budget and reality

This is perhaps the most important lesson for a citizen reading a county budget.

A county can allocate money to a road, market, water project or health programme without spending that money within the financial year.

The Controller of Budget’s reports therefore track not only allocations but also absorption- how much of the approved budget has actually been spent.

In the first quarter of 2025/26, counties had spent Sh55.15 billion, representing only 9 per cent of their annual budgets.

Of this expenditure, Sh51.46 billion went to recurrent activities while only Sh3.69 billion was spent on development.

That early-year figure does not by itself indicate how the entire financial year will perform; spending generally accelerates as the year progresses.

But it demonstrates why looking only at a county’s approved budget can be misleading.

The question is not simply: How much was allocated? It is: How much was released, contracted, spent and ultimately delivered?

Where the money can get stuck

The journey from allocation to delivery is not always straightforward.

A county may budget for a project, but implementation can be affected by delayed revenue, procurement processes, contractor performance, pending bills or other financial obligations.

Pending bills are particularly important because they can represent obligations arising from goods, services or works that a county has already procured but has not fully paid for.

The latest county budget implementation figures put outstanding county trade payables at about Sh172 billion as of June 30, 2026, with Nairobi City County accounting for about Sh86.9 billion.

The scale of the backlog is not simply a national statistic. At March 31, 2026, Nairobi had Sh81.13 billion in pending bills, including Sh61.6 billion that had remained unpaid for more than three years.

For Nairobi, the county has attributed part of the reduction in its reported pending bills to reconciliation.

City hall said that the county had reviewed legal-fee claims, removed amounts it considered unjustified, addressed a contested Sh300 million bank loan and paid Sh1 billion in outstanding pension obligations.

The Controller of Budget, however, said the county had not provided a detailed explanation of how the reconciliation produced the reduction and called for the matter to be reported to the Auditor-General.

This distinction matters because not every amount listed as a pending bill necessarily has the same status. Some obligations may be verified and payable, while others may be disputed, unsupported or awaiting reconciliation.

For a supplier, the difference between an approved budget and cash in the bank is significant.

A project may appear in a county budget and a contractor may have completed work, yet payment can remain outstanding.

For the county, accumulated bills also reduce the room available for new spending because current budgets must accommodate obligations from previous years.

Follow one project to the ground

The clearest way to understand county spending is to follow a single project from the budget document to the physical site.

An Auditor-General’s examination of Wajir’s water spending provides an illustration. During the 2024/25 financial year, the county spent Sh94.86 million on drilling, developing and testing boreholes. One contract for drilling, developing and testing the Baragothey BH2 borehole in Wajir West was valued at Sh4.06 million, of which Sh2.77 million had been paid when the project was inspected.

But physical inspection found the borehole was dry and not in use.

The audit also noted that a hydrogeological survey had identified a history of dry boreholes and low groundwater potential at the site, yet drilling proceeded.

In another Wajir West location, Garseykhoftu, Sh3.73 million had been paid for a borehole that had been drilled but not equipped and therefore remained non-operational, meaning local communities had not benefited from the project.

The example shows why the journey of a county shilling cannot end with a payment voucher.

The relevant questions are whether the project was properly planned, whether procurement was completed, how much was paid, whether the physical work was completed and whether residents ultimately received the service the expenditure was supposed to provide.

When spending does not mean value

The difference between expenditure and value for money is critical.

A county can report that money was spent without that expenditure necessarily translating into the full service or infrastructure residents were promised.

A completed financial transaction does not automatically mean a completed project.

The Auditor-General’s recent county audit provides several examples. In Wajir, physical inspection found that money had been spent on boreholes that were either dry or remained non-operational. In the case of Baragothey BH2, the Sh4.06 million contract had received Sh2.77 million in payments, but the borehole was dry and not in use. The Auditor-General said value for money could not be confirmed.

That is the difference between financial execution and physical delivery.

What should a citizen look for?

For an ordinary resident, a county budget can be reduced to a few questions.

How much money is the county supposed to receive?

How much does it expect to collect locally?

How much is going to salaries and operations?

How much is earmarked for development?

Which specific projects are being funded?

How much has actually been spent?

And, most importantly, what exists on the ground?

The Controller of Budget publishes county budget implementation reports, while county assemblies approve budgets and county governments publish planning and budget documents.

The CRA’s revenue-sharing framework also makes clear that counties have different expenditure needs and priorities.

This means a citizen seeking accountability should compare the promise with the expenditure – and the expenditure with the result.

Ultimately, the county budget is not merely a document filled with billions and percentages.

It is a financial map of what a county intends to do with public resources.

But the map only becomes meaningful when it is followed beyond the budget document.

The money starts with allocations and revenue targets. It moves through county budgets, recurrent obligations, procurement and development programmes. Some of it may remain unspent. Some may become pending bills. Some may be paid to contractors or suppliers.

The final test is what remains at the other end of that chain.

Was the road built?

Does the water flow?

Is the health facility equipped?

Was the farmer reached?

Did residents receive the service they were promised?

Understanding that journey allows citizens to move beyond asking how much their county received.

The more important question is what happened to the money after it arrived – and whether it became the services, infrastructure and opportunities that devolution was designed to bring closer to citizens.