Six counties have missed the chance to access a combined Sh1.3 billion from the Equalisation Fund, an audit report shows, leaving critical development projects stalled and residents in marginalised areas without improved water, roads, health facilities, and electricity.
The latest report by Nancy Gathungu for the financial year ending June 30, 2025, shows that Bomet, Bungoma, Kericho, Kitui, Lamu, and Narok did not submit any project proposals for approval by the Equalisation Fund Board.
The failure means the counties were unable to tap into money allocated to improve access to essential services in disadvantaged areas.
The Equalisation Fund is designed under the Constitution to support counties that are historically marginalised, requiring 0.5 percent of the national government’s annual revenue to be set aside for this purpose. The fund aims to bring basic services closer to residents, particularly in arid and semi-arid regions that have been left behind in infrastructure and social services.
County governments are expected to submit project proposals to the Equalisation Fund Board for clearance before funds are released. Projects financed through the fund must target improvements in water supply, roads, healthcare facilities, and electricity provision.
The audit does not indicate why the six counties failed to send their proposals, leaving a funding gap for planned projects.
The fund is managed by the Equalisation Fund Advisory Board, which ensures proper use of the allocation, oversees ongoing projects, and guides the rollout of new initiatives.
According to Regulation 15 of the Public Finance Management (Equalisation Fund Administration) Regulations, 2021, the County Technical Committee is responsible for approving all projects financed from the fund.
The report further notes that only Sh2,898,928,827, or 48 percent of the total approved fund, was requested by counties for project financing during the year.
“In view of the above, there was a delayed implementation of projects and the ultimate objective of the fund might not be achieved,” the audit states.
The fund also carries forward any unspent allocation from previous years. Under Article 204 (5) and Section 18 (6) of the Public Finance Management Act, 2012, unutilised funds do not expire but remain in the fund for their intended purpose.
The first marginalisation policy was created in 2013 and approved in December 2014, covering a three-year period from 2014/15 to 2016/17. Initially, 14 counties were classified as marginalised and started benefiting from the fund.
These counties included Kilifi, Kwale, Taita Taveta, Garissa, Mandera, Wajir, Tana River, Marsabit, Isiolo, Samburu, Narok, Turkana, West Pokot, and Lamu. The Commission on Revenue Allocation later expanded the programme to 34 counties, adding Baringo, Bomet, Bungoma, Busia, Elgeyo Marakwet, Garissa, Homa Bay, Isiolo, Kajiado, Kericho, Kilifi, Kisumu, Kitui, Kwale, Laikipia, and Lamu.
Other counties now benefiting include Machakos, Mandera, Marsabit, Meru, Migori, Murang’a, Nakuru, Nandi, Narok, Samburu, Siaya, Taita Taveta, Tana River, Tharaka Nithi, Trans Nzoia, Turkana, Wajir, and West Pokot. The revised policy identifies specific sub-locations and wards in these counties as marginalised, ensuring targeted support for communities most in need.
