Thousands of residents in Kenya's most underserved areas could continue struggling without reliable roads, water, health facilities and electricity after an audit revealed that Sh51.8 billion meant for the Equalisation Fund has not been released, leaving the programme far behind schedule with only six years remaining before it expires.
The latest review by Auditor-General Nancy Gathungu shows that the fund, which was created under the Constitution to reduce development disparities across the country, has received only a small portion of the money it was entitled to over the years.
The Equalisation Fund was established to help regions that have historically lagged behind gain access to basic services available in other parts of the country. The programme targets projects in key sectors including water, roads, health and electricity.
However, the audit covering the period ending June 30, 2025, indicates that the programme is facing serious challenges that could prevent it from meeting its intended purpose.
According to the Constitution, the fund should receive 0.5 per cent of national revenue every year. The audit shows that between the 2011-12 and 2024-25 financial years, the fund should have accumulated Sh67.8 billion.
Instead, only Sh15.93 billion had been transferred by June 2025, leaving a balance of Sh51.8 billion yet to be remitted.
“The National Treasury had not remitted the remaining balance of Sh51.8 billion to the Fund as at 30 June, 2025 and was, therefore, in breach of the Constitution,” the audit states.
The Auditor-General cautioned that the continued failure to release the required funds has placed the programme's success in doubt.
“Given the low level of disbursements as indicated above, the country is not likely to achieve the objectives of the Equalisation Fund,” the report says.
The warning comes as the fund approaches its constitutional deadline. The programme is set to lapse in the 2031-32 financial year, which marks the end of the 20-year period provided for under the Constitution.
The challenge is made even greater by the expansion of the programme over the years.
When the Commission on Revenue Allocation developed the first policy on marginalisation in 2013, only 14 counties qualified to benefit from the fund. Among them were Turkana, Mandera, Wajir, Marsabit, Samburu, West Pokot and Garissa.
A second policy adopted in 2018 expanded coverage to 1,424 marginalised areas spread across 34 counties, increasing the number of communities expected to benefit from the programme.
Despite this wider reach, progress on the ground has remained slow.
The matter was raised in Parliament on Thursday by Tiaty MP William Kamket, who sought clarification from the Treasury on when Baringo County would receive its full allocation from the fund.
Under the Equalisation Fund Appropriation Act, 2023, a total of Sh10.02 billion was set aside for projects under the second policy.
However, auditors found that Bomet, Bungoma, Kericho, Kitui, Lamu and Narok had not secured approval for any projects despite being allocated a combined Sh1.37 billion. The report attributes the delays to the failure by the counties to submit project proposals.
The audit further shows that only Sh2.9 billion, representing 48 per cent of approved project funding, had been requisitioned and released.
In addition, 13 counties with approved projects worth more than Sh2 billion had not spent any of the allocated money.
By June 2025, only 29 per cent of the funds appropriated for the programme had been transferred, slowing the implementation of projects intended to improve the lives of people living in some of the country's most neglected areas.
The findings have renewed concerns about whether the Equalisation Fund can fulfil its mission of narrowing development gaps before the constitutional window closes.