The National Treasury has stood its ground on plans to introduce a single integrated county revenue management system, dismissing opposition from governors who want to retain their own platforms.

Treasury Cabinet Secretary John Mbadi told the Senate County Public Accounts Committee on Thursday that the system, which will replace the different platforms currently in use across counties, is ready for rollout.

“We are rolling out an integrated county revenue management system. It is going to replace this fragmented county revenue management framework,” Mbadi said.

Through the Council of Governors, county chiefs have opposed the plan, saying it amounts to the national government dictating the systems they should use.

In 2023, they rejected a Bill requiring counties to develop revenue collection systems jointly with the Kenya Revenue Authority (KRA), arguing that many had already invested public funds to build their own.

“A significant number of counties are already implementing revenue collection systems that ought to be recognised by law, as public resources have been used to develop them,” the CoG said then.

Mbadi insisted it was wasteful and illogical for the country to operate dozens of separate platforms for the same purpose.

“We cannot have 47 or 48 systems in a country dealing with revenue collection. We should have at most two or three,” he said.

The CS said the ministry had engaged governors and other stakeholders through the Intergovernmental Budget and Economic Council to prepare for the rollout.

“We have discussed this at the Intergovernmental Budget and Economic Council. Though there has been pushback from governors, as expected, I think we are getting to a point of clarity. There was just a misunderstanding,” Mbadi noted.

Counties currently run disjointed systems, with some hiring financial technology firms to automate and collect revenue on their behalf.

These contracts often cost millions in procurement fees, along with commissions on every shilling collected.

Last year, KRA commissioner general Humphrey Wattanga told senators that the use of different vendors and lack of standardised collection processes were hurting county revenues.

He warned that some procurement arrangements were driven by vendors, with unclear technical requirements and commission rates that were in some cases unreasonably high.

Some counties have yet to automate revenue collection, still relying on manual systems inherited from defunct local authorities such as the Local Authority Integrated Financial Operations Management System.

In 2024, senators asked Auditor General Nancy Gathungu to investigate all external revenue collection firms contracted by counties over concerns about the accuracy of reported figures.

Lawmakers cautioned that weak oversight was creating loopholes for companies to siphon billions from county coffers.

Gathungu told the committee that questionable firms, some existing only on paper, were costing counties huge amounts of revenue.

She also reminded senators that while the law empowers the National Treasury to prescribe revenue collection systems for counties, governors had engaged vendors without proper due diligence, agreeing to widely varying commission rates.