Counties to get quicker access to funds under proposed bill

The government is moving to simplify the release of conditional grants to county governments by removing the National Treasury’s role in approving these funds.

A new amendment bill before Parliament aims to scrap the requirement for counties to enter into detailed agreements with the Treasury before receiving their conditional allocations.

This move is seen as a way to reduce delays that have long hindered county projects and service delivery.

National Assembly Majority Leader Kimani Ichung’wah is sponsoring the Public Finance Management (Amendment) Bill, 2025, which targets parts of the current law that require intergovernmental agreements.

"The purpose of the Public Finance Management (Amendment) Bill, 2025, is to ensure there shall be no duplication in the management of additional allocations through intergovernmental agreements," he said in the bill’s memorandum.

The bill proposes repealing Sections 191A to 191E of the Public Finance Management Act, which currently govern the process.

Under the existing framework, counties must negotiate terms with the Treasury, gain assembly approval within 14 days, hold public participation forums, publish the agreements in the Kenya Gazette, and submit them to both the Senate and the Controller of Budget.

These steps have led to significant delays in disbursing funds meant for important projects like healthcare services, construction of county headquarters, and payment of community health workers.

Five counties, for example, have struggled with stalled headquarters projects due to these bureaucratic bottlenecks and frequent budget cuts.

Contractors have at times abandoned the works because of uncertainty around funding.

The government argues that these layers of approvals are no longer necessary and slow down progress.

Last month, the National Assembly’s budget committee warned that such financial delays risk undermining the sustainability of key county programmes, especially those relying on external funding.

After approving an extra Sh50 billion for counties, the committee stressed the need for a more efficient release process.

If the bill passes, counties will access conditional grants directly, bypassing the Treasury’s oversight and reducing the chances of stalled projects.

However, the current law was originally designed to protect funds from misuse by ensuring clear agreements and accountability.

Governors have repeatedly called for fewer restrictions on how they manage devolved funds, complaining that the national government retains control over money meant for county functions.

Through their council, they have demanded urgent discussions to resolve delays in transferring funds and functions. Counties are reportedly owed Sh75 billion in pending disbursements as of May 2025.

The Council of Governors has appealed to the Treasury to promptly release all additional allocations that have already been approved by law to avoid further delays in development.