Counties and public institutions facing drawn-out power struggles may soon lose access to state funding if the government acts on a call by Controller of Budget Margaret Nyakang’o.

While addressing the Senate Justice and Legal Affairs Committee, Nyakang’o said the National Treasury should stop releasing funds to entities whose internal wrangles have gone unresolved for more than three months.

She urged Treasury Cabinet Secretary John Mbadi to exercise the legal powers available to him under the Public Finance Management Act to impose financial sanctions on institutions whose governance has broken down.

“The Cabinet Secretary for the National Treasury can invoke his powers under the PFM Act to stop funding to entities with wrangles that extend beyond three months,” she said.

Nyakang’o cited Article 225 of the Constitution, which allows the Treasury to suspend transfers to any public body or state organ that is in serious or continuous breach of the law, provided Parliament gives its approval.

However, any such suspension is capped at 50 per cent of the allocated amount and can only last up to 60 days.

She said Parliament should move with speed to pass legislation to guide how public funds are handled when counties or institutions fall into crisis.

“The Controller of Budget is concerned about the accountability of public funds in entities experiencing leadership and operational crises,” Nyakang’o told senators.

The remarks come against the backdrop of a leadership standoff in the Nyamira County Assembly, where two rival factions are both claiming to be the legitimate authority. The conflict has created a dysfunctional system, with each side naming its own speaker, clerk, and assembly board.

“There are two factions with separate leadership structures—including speakers, clerks and assembly service boards—leading to confusion, legal uncertainty and an inability of the county assembly to fulfil its constitutional mandate,” states a Senate report.

One group operates from the official county assembly chambers, while the other meets at a gazetted ward office, further deepening the impasse. The split has paralysed the assembly’s functions and affected coordination with oversight bodies.

Nyakang’o disclosed that her office has been caught in the middle of the dispute, receiving separate communications from both camps. This, she said, creates serious confusion and complicates budget oversight.

“The contestation of the office of the speaker has the dire consequence of affecting all other county assembly service structures. It is imperative to determine who the legitimate speaker is,” Nyakang’o added.

The Senate committee investigating the matter said the leadership feud in Nyamira has already stalled public service delivery and weakened financial accountability. Members of the committee said continued funding of the divided assembly would only fuel further dysfunction and misuse of public money.

They agreed with Nyakang’o that targeted financial penalties may be the only way to push affected counties and institutions into resolving their disputes quickly.