By Anderson Ojwang
The Ad Hoc Committee, after reviewing the bank statements and records, established and identified suspicious transactions and systemic reconciliation failures.
And now the committee has recommended an urgent forensic audit into the suspicious transactions.
“The reviewed KCB bank statement records identified suspicious transactions and systemic reconciliation failures that warrant forensic investigation,” the committee wrote.
The committee further established that reconciliation between the county and Safaricom PLC was conducted only quarterly, a structurally deficient arrangement.
“The gap between 21 and 23 hospital Paybills operating outside the IRMS, accounting for Kshs 1,932,649,051 in FY 2024/2025, means the dominant driver of Own Source Revenue growth was entirely outside the automated reconciliation framework,” it observed.
The committee said the mismatch between the approved budget figure of Kshs 3,804,073,100 for FY 2024/2025 (Budget Implementation Report, Quarter 4) and the actual collections of Kshs 2,463,027,946 represents a 65% performance rate.
Similarly, the Revenue Board CEO’s performance contract target of Kshs 2.1 billion created a discordance of Kshs 1.5 billion against the approved budget of Kshs 3.6 billion for FY 2025/2026 – an institutionalised underperformance target.
Findings
The committee found that the failure to sweep daily collections fully to the County Revenue Fund account contravenes Section 109(4)(b) of the PFM Act; the quarterly reconciliation cycle is structurally inadequate and has enabled the accumulation of arrears; and the deliberate alignment of the CEO’s performance contract at Kshs 2.1 billion against a budget of Kshs 3.6 billion institutionalised underperformance and created a governance contradiction that cannot have been accidental.
Equally, two years after the allegations of the Sh273 million revenue loss by Kisumu County Government, the Finance department was yet to undertake reconciliation and forensic audit.
Why has the CEC Finance, George Omondi Okongo, failed to reconcile the books or undertake a forensic audit following the allegations of Sh273 million revenue loss?
The committee revealed the existence of off-system cash collections, informal collection arrangements, and unreceipted transactions that materially undermine the ability to conclusively attribute any alleged revenue discrepancies to the IRMS itself.
The committee said the CEC Member, Mr George Omondi Okongo, submitted that an internal estimate had indicated up to 887,086 transactions, with an approximate value of Kshs 273,000,000, had been removed from active visibility within the IRMS, pending verification and reconciliation of records provided by Safaricom PLC and the technology partner.
Correspondence and supporting documentation shared by Safaricom PLC indicated that the removal process had been undertaken pursuant to formal instructions issued by the relevant county revenue authorities in the course of operational and administrative processes within the system.
Safaricom PLC acted on the basis of those instructions as communicated through the established engagement framework with the county and its designated stakeholders.
The committee further notes that the alleged Kshs 273,000,000 loss remains an unproven allegation of fraud and has not been conclusively established through any completed forensic audit, reconciliation exercise or judicial determination.
Further, as evidenced by the documentation and invoices provided by Safaricom PLC, no Software as a Service (SaaS) fees constituting four per cent (4%) of collections are payable to Safaricom PLC unless and until a detailed reconciliation process is undertaken, verified and formally signed off by both parties.
This demonstrates that the county not only reviews but actively verifies and approves the reconciled revenue figures prior to invoicing and payment, and that the invoices issued by Safaricom are neither arbitrary nor unilateral in nature.
On Transaction Deletion, Restoration and the Kshs 273,000,000 Claim
According to the County of Kisumu, approximately 887,086 transactions were archived at the request of the Kisumu Revenue Board, primarily consisting of unstructured revenue (such as unpaid parking fees held beyond 24 hours) and duplicated invoices.
A formal letter from a Revenue Board employee identified as Benter requested the removal of these records. Safaricom PLC and RevTech Innovation Limited complied with the directive issued by county officials, including the then-CEO Lawrence, who cited concerns about “perishable” unpaid invoices clogging the system.
Due to an inaccurate script used in the archiving exercise, some structured transaction invoices were mistakenly archived alongside unpaid ones. These were subsequently restored from cloud backups as a single batch without filtering.
This was confirmed by the Director of ICT during the meeting with Safaricom. Further, Safaricom PLC shared minutes dated 2nd October 2024 which, under the agenda item on Data Integrity, confirmed that the archived logs had been retained within the system without any further deletion.
Safaricom PLC also provided an email dated 11th October 2024 from Isaac Kabutha to the County Government of Kisumu confirming that the archived transaction records had subsequently been restored and uploaded back into the system.
The same correspondence further confirmed that a link containing the archived logs had been shared with the county’s ICT officer for access and verification.
Safaricom’s position
Safaricom maintains that no actual revenue was lost because the system’s payment flow directs all Pay Bill *427# payments directly into the county’s designated bank account, making diversion or financial loss through the archiving process technically impossible.
Safaricom further clarified that, prior to the county’s later assertions and demand letter, it had never previously been informed or made aware of allegations that 887,086 transactions valued at approximately Kshs 273,000,000 were allegedly missing.
Accordingly, Safaricom’s earlier response stating that it was “not aware of any missing transactions” was based on the understanding that the archived logs had already been restored and verified as communicated in the meetings and correspondence exchanged with the county.
Safaricom’s position was therefore that the Kshs 273,000,000 was an alleged loss and the calculation behind this loss was unknown.
During the committee proceedings, Safaricom reiterated its commitment to transparency, cooperation and full disclosure, including continued sharing of logs, audit trails and restoration records to support reconciliation and verification efforts.
However, the committee notes that the archiving exercise affected reporting accuracy and created discrepancies between certain system reports and bank balances.
The Kshs 273,000,000 claim
The committee found, based on evidence gathered at Sitting No. 21 (14th May 2026), Sitting No. 23 (20th May 2026), and the report submitted by Safaricom PLC on 22nd May 2026, that the archiving of transactions from the IRMS was undertaken pursuant to instructions issued by officers of the County Government of Kisumu.
The material presented before the committee indicated that a total of 3,366 logs amounting to Kshs 131,580,713.40, comprising both structured and unstructured invoices, were archived following formal requests attributed to county officials.
The evidence further demonstrated that the archived logs were subsequently restored onto the system, a position confirmed through minutes shared by Safaricom PLC as well as subsequent correspondence and email confirmations acknowledging that the removed records had been reinstated within the IRMS.
In light of the foregoing, the committee noted that the claim for Kshs 273,000,000 in alleged revenue loss remains unsubstantiated, particularly in the absence of a completed reconciliation exercise, forensic audit, or other conclusive evidence establishing actual loss attributable to the archived transactions.
Review
Safaricom PLC initiated an independent review into RevTech activities on 12th November 2024 following correspondence from the county dated 11th October 2024 raising concerns regarding possible irregularities.
The committee noted that, subsequent to the earlier sitting, Safaricom PLC shared additional reports, logs and supporting documentation relating to the matter, including information concerning archived and restored transactions.
The committee further noted Safaricom PLC’s continued participation in committee sittings, cooperation with requests for information, and stated commitment to transparency, accountability and continued collaboration with the county in resolving outstanding reconciliation and operational matters relating to the Integrated Revenue Management System.
The committee noted that despite the acknowledged system challenges, Safaricom PLC asserted a one hundred and thirteen per cent (113%) increase in revenue collection attributed to the ICRMS, demonstrating the system’s value in automation, transparency and real-time reconciliation.
On IT System (IRMS) Performance and Technical Deficiencies
The CEC Member submitted that a persistent identified issue was that payment postings take multiple days to reflect in the IRMS, affecting reconciliation and client service.
A Joint Technical Committee produced remedial recommendations. Data quality gaps were confirmed, including outdated land rates records, an incomplete business register, and inconsistent valuations. Safaricom shared communication that explains the archiving of transactions and confirmed restoration of the same.
Resolutions and Immediate Action Requests: The committee formally resolved:
- That the Treasury reconcile accounts with Safaricom and pay any outstanding amounts found to be due;
- That the CECM Finance obtain and verify Board minutes and resolutions authorising any transaction deletions;
- That HR and legal consequences for implicated staff be pursued;
- That technical fixes be completed, bank sweep anomalies be reconciled, datasets be integrated, and technical staff recruitment be operationalised;
- That clearer communication on rates and receipts and visible value-for-money demonstrations be implemented;
- That public awareness campaigns and clearer communication of billing practices be implemented;
- That revenue collectors be vetted, with patronage-based appointments converted to performance-based contracts where appropriate.
