NAIROBI, Kenya – Counties across the country, including Nakuru, Kisumu, Uasin Gishu, Bungoma, and Narok, are staring at a financial paralysis after the Controller of Budget (CoB) Margaret Nyakang’o rejected 26 county budgets for the 2025/26 financial year.
The move effectively blocks cash disbursements, raising fears of salary delays, stalled development projects, and shortages of medicines in hospitals.
Why Budgets Were Rejected
Nyakang’o said her office returned the budgets due to illegal allocations, disguised expenditures, missing documents, and non-compliance with the law.
“Only the cleared ones are sent to IFMIS and can therefore requisition funds. The ones with comments mean we came across non-compliance in the submitted budget and wrote back to the county to explain themselves,” she said.
Eighteen counties were flagged for failing to tie allocations to specific projects, while six counties, including Wajir, Mandera, Meru, Nyandarua, Trans Nzoia and Siaya, failed to submit their budgets by Tuesday’s deadline.
Others flagged include Bomet, Busia, Kajiado, Kericho, and Garissa, while Isiolo’s documents have been referred to the CoB’s legal department.
Treasury: Funds Already Disbursed
Treasury CS John Mbadi confirmed that July allocations were released to the County Revenue Fund on August 11 but said counties cannot access the funds until the budget issues are corrected.
“Treasury has now become timely in sending money, that’s why counties are not complaining. The challenge is on their budgets,” Mbadi said.
Disguised Expenditure Exposed
The CoB further revealed that some counties misclassified recurrent expenses as development spending to meet the legal requirement that at least 30% of budgets go to development.
Among the wrongly listed items were:
- MCAs’ car and mortgage loans
- Bursaries and scholarships
- Foreign travel and benchmarking trips
- Consultancy services
- Procurement of drugs and medical supplies
Nyakang’o stressed that such items cannot be considered development expenditure since they do not create or renew assets.
Looming County Shutdown
The budget stalemate now threatens to:
- Delay salaries for county staff
- Stall payment of pending bills to suppliers
- Trigger medical shortages in county hospitals
Quoting the law, Nyakang’o said:
“No public funds shall be appropriated outside an approved planning framework as per Section 104 (1) of the County Government Act.”
She urged counties to strictly align budgets with their County Integrated Development Plans (CIDPs) and County Fiscal Strategy Papers (CFSPs) to ensure compliance.
