Thousands of learners, youth and women across the country are staring at tough times ahead after Controller of Budget Margaret Nyakang’o stopped funding for several county-run bursary, loan and empowerment programmes, citing expired legal mandates.

Nyakang’o's decision affects a wide range of devolved funds, including bursary schemes, youth and women funds, alcoholic drinks control funds, car and mortgage loan programmes for county officials, as well as emergency and disaster funds.

The freeze has left counties scrambling, with fears that essential services and support for vulnerable groups could grind to a halt.

The Controller’s directive is based on Regulation 197(1)(i) of the Public Finance Management (County Governments) Regulations, 2015, which limits the lifespan of county-established public funds to ten years unless formally renewed by the county assembly.

However, Nyakang’o’s latest Budget Implementation Review Reports reveal that many counties have continued running such funds well beyond their legal timelines, in violation of the law.

In Bungoma County, funding for the Trade Loan Fund, Education Support Scheme and the Youth and Women Fund has been stopped after their mandates expired. “Consequently, the CoB cannot approve any requests for withdrawals to support the operations of these lapsed funds, as they no longer have a legal basis for continued existence,” the report reads.

Busia County has also been hit hard, with Nyakang’o reporting that the lifespans of all five of its county-established funds have expired. These include the bursary and scholarships programme, Agriculture Development Fund, Cooperative Enterprise Fund, County Executive Revolving Fund, and the county assembly’s separate revolving fund. In total, the county had allocated Sh219.80 million to these funds in the 2024/25 financial year—2.4 per cent of its total budget.

In Elgeyo Marakwet, the CoB ceased funding for the Education Fund, County Executive Car and Mortgage Loan Fund, and the MCA and Staff Car Loan and Mortgage Fund due to similar expiration issues.

In Embu, the Embu County Youth Trust Fund has lapsed. In Garissa, Nyakang’o has suspended support to the Disaster Management/Emergency Fund and the Bursary Fund. The same situation has been flagged in Kajiado and Kakamega counties, where the Liquor Fund and County Alcoholic Drinks Control Fund, respectively, are no longer eligible for disbursements.

Kakamega had allocated Sh433.50 million to such funds in the current financial year, representing 2 per cent of its overall budget, alongside Sh100 million for its Emergency Fund.

In Kisii, the Controller found that the Bursary Fund, MCAs’ Car Loan and Mortgage Fund, Staff Car Loan and Mortgage Fund, and Health Fund had all surpassed their approved lifespan.

Homa Bay County, meanwhile, has been advised to urgently act before December 31 to extend the lifespan of both its Bursary Fund and Alcoholic Drinks Control Fund, which are nearing expiry. “This necessitates a timely review and extension of these public funds to prevent operational disruptions,” Nyakang’o cautioned.

The revelations have turned the spotlight on the failure of county assemblies and legal teams to ensure compliance with financial laws. Section 116 of the PFM Act, 2012 permits counties to create public funds, but only within a clearly defined legal framework that must be reviewed and extended in good time.