Thousands of students, youth and women who depend on bursaries and empowerment programmes are set to suffer after Controller of Budget Margaret Nyakang’o suspended funding for numerous county-managed funds.
The directive also affects disbursements for mortgages and car loans for MCAs and county officials, as well as disaster and emergency funds – exposing devolved units to potential crises.
Nyakang’o’s move follows the lapse of several key county-specific funds, including the Education Support Scheme (bursary funds), Mortgage and Car Loan Fund and Youth and Women Fund.
Also affected in several counties is the Alcoholic Drinks Control Fund, which generates significant revenue for local governments.
The action has raised concern among devolved units, many of which rely on the funds to deliver critical services and support vulnerable populations.
“This is a significant setback,” said a senior Council of Governors official.
“We have students, staff and community members who depend heavily on these resources.”
Section 116 of the PFM Act 2012 allows county governments to establish other public funds, subject to approval from the county executive committee and the county assembly.
However, Regulation 197(1)(i) of the Public Finance Management (County Governments) Regulations, 2015, caps the lifespan of public funds established by counties at 10 years, unless extended by a formal resolution of the county assembly.
According to Nyakang’o’s latest Budget Implementation Review Reports – covering the first nine months of the 2024-25 financial year – several counties have continued to operate funds beyond their approved legal timelines.
The revelation has cast a spotlight on the efficiency of county attorneys and assemblies, who are responsible for ensuring compliance and timely renewal of these funds.
In Bungoma, disbursements to the Trade Loan Fund, Education Support Scheme and Youth and Women Fund have been stopped after their lifespans lapsed.
“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.
In Busia, Nyakang’o found that the lifespans of all county-established funds had expired.
The county executive runs four such kitties – the Agriculture Development Fund (which supports farmers with inputs), the bursary and scholarships programme, the Cooperative Enterprise Fund and the County Executive Revolving Fund.
The county assembly also operates a separate revolving fund.
“The county allocated Sh219.80 million to county-established funds in FY 2024/25, representing 2.4 per cent of the county’s overall budget,” the report states.
In Elgeyo Marakwet, the CoB ceased funding for the Education Fund, the County Executive Car and Mortgage Loan Fund and the MCA and Staff Car Loan and Mortgage Fund, all of which had expired.
In Embu, the Embu County Youth Trust Fund has lapsed.
In Garissa, Nyakang’o halted funding for both the Disaster Management/Emergency Fund and the Bursary Fund.
In Homa Bay, the CoB advised the county to urgently review the lifespan of the Bursary Fund and the Alcoholic Drinks Control Fund, both of which are set to expire on December 31.
“This necessitates a timely review and extension of these public funds to prevent operational disruptions,” the report warns.
In Kajiado, the lifespan of the Liquor Fund has lapsed, prompting Nyakang’o to halt funding approvals.
In Kakamega, the County Alcoholic Drinks Control Fund has also expired.
“In FY 2024-25, the county allocated Sh433.50 million to county-established funds, constituting 2 per cent of the county’s overall budget. Further, the county allocated Sh100 million to the Emergency Fund,” the CoB notes.
In Kisii, the CoB established that the lifespan of the Bursary Fund, the MCAs’ Car Loan and Mortgage Fund, the Staff Car Loan and Mortgage Fund and the Health Fund (KTRH) had lapsed.
“Consequently, the CoB cannot approve any requests for withdrawals to support the operations of these lapsed funds,” Nyakang’o said in the report.
The CoB has withheld funding for the Kisumu County Bursary Fund and the Kisumu County Assembly Car Loan and Mortgage Fund, whose legal timelines have lapsed.
In Kitui, MCAs cannot access car loans and mortgages.
“During the reporting period, the CoB established that the lifespan of the Kitui County Assembly Car Loan and Mortgage (Members) Scheme Fund and Kitui County Assembly Service Board Employees’ Car Loan and Mortgage Fund had lapsed,” the report says.
Funding for Machakos County Housing and Car Loan Scheme Fund – MCA and the Machakos County Education Bursary Fund has been halted.
In Mandera, the CoB has ceased funding for the Bursary Fund.
The CoB established that the lifespan of the Emergency Fund, Marsabit County Assembly Car Loan and Mortgage Fund for Members, Enterprise Fund and Car and Mortgage Loan Fund for Executives had lapsed.
In Meru, Nyakang’o established that the lifespan of the Meru County Executive Staff Housing Fund and the County Assembly of Meru Staff Car Loan and Housing Scheme Fund has expired.
In Migori, the lifespan of the County Education Bursary Fund and the County Scholarships and Educational Benefits Fund has lapsed despite being in operation.
The CoB has called on county assemblies to review and formally extend the lifespan of affected funds to prevent further service disruptions.
Failure to do so will continue to hinder service delivery, affecting thousands of beneficiaries across the country.
In Murang’a, MCAs cannot access mortgage and car loans after the CoB established that the lifespan of the County Assembly Car Loan and Mortgage Fund has lapsed.
Nyakang’o established that the lifespan of the Car and Mortgage Fund (Assembly) and the Car Loan and Mortgage Fund (Executive) in Nyamira has expired, while funding for all county-established funds in Siaya has been stopped for the same reason.
They include the County Bursary Fund, the Cooperative Development Fund and the County Assembly Car Loan and Mortgage Fund.
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