County governments are under pressure as dozens of public funds lapse, threatening student bursaries, empowerment initiatives, and staff financial benefits.
The Controller of Budget, Margaret Nyakang’o, reported that by September 30, 79 county public funds had either expired or were close to their legal limit, putting billions of shillings and key programmes in jeopardy.
Nyakang’o cautioned that expired funds cannot be withdrawn from the national treasury, which could disrupt vital services. She urged counties to act swiftly to extend existing funds or create new ones within the law.
“Counties risk paralysing key services if urgent remedial action is not taken,” Nyakang’o said.
The report shows that several counties continue to operate funds beyond their legal life, exposing them to audits and potential legal action.
Section 116 of the Public Finance Management (PFM) Act, 2012, allows counties to set up public funds with approval from the county executive committee and county assembly.
According to Regulation 197(1)(i) of the PFM (County Governments) Regulations, 2015, a fund can only last ten years unless formally extended by the county assembly. If not renewed, the funds automatically expire.
Nyakang’o emphasised that all spending from expired funds must stop immediately. Counties are required to legally re-establish or wind up the affected funds in line with the PFM Act to avoid complications.
The situation affects multiple counties. In Baringo, seven funds created in 2014, including the Small and Medium Enterprise Fund, County Bursary Fund, Youth and Women Fund, Corporate Development Fund, Persons with Disabilities Fund, Lake Bogoria Grants, and the County Assembly Car and Mortgage Fund, have expired. Bomet’s County Executive Car Loan and Mortgage Fund is also no longer valid.
Bungoma has seen the lapse of the Scholarship and Other Educational Benefits Fund, Trade Loan Fund, Women Empowerment Fund, Youth Empowerment Fund, and MCA Car Loan and Mortgage Scheme Fund. Busia can no longer withdraw from its Agriculture Development Fund, Bursaries and Scholarships Fund, and Cooperative Enterprise Fund.
In Turkana, five key funds, including Biashara, Education, and Youth and Women Funds, have lapsed. Marsabit faces expiry of five funds, including the Emergency Fund.
Other affected counties include Kericho, Kitui, Machakos, Migori, Nakuru, and Siaya, where bursaries and staff car loan and mortgage schemes are no longer accessible.
Nyakang’o’s report underscores the urgent need for counties to comply with legal requirements to safeguard bursaries, empowerment programmes, and staff benefits. Without immediate action, the lapse of these funds could paralyse social and financial support systems at the county level.
