Controller of Budget halts funds to counties over expired bursary, loan programmes
Nyakang’o revealed that many devolved units have continued to operate public funds whose legal lifespan had ended without proper renewal by the county assemblies.
A wave of uncertainty has hit several county governments after Controller of Budget Margaret Nyakang’o suspended the release of funds to expired bursary, loan, and emergency programmes, jeopardising services that benefit thousands of residents.
In her latest Budget Implementation Review Report for the 2024/25 financial year, Nyakang’o revealed that many devolved units have continued to operate public funds whose legal lifespan had ended without proper renewal by the county assemblies.
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The affected funds include bursaries for needy students, youth and women empowerment programmes, car and mortgage loans for MCAs and staff, alcoholic drinks control funds, and an emergency response kitty.
Regulation 197(1)(i) of the Public Finance Management (County Governments) Regulations, 2015, sets a 10-year limit for such funds unless an extension is passed by the county assembly.
Despite this, the Controller found that dozens of counties had not taken steps to renew them, raising legal concerns over ongoing disbursements.
In Bungoma, Nyakang’o stopped funding for the Trade Loan Fund, the Education Support Scheme and the Youth and Women Fund, all of which had expired.
“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.
Busia County was flagged for operating five expired funds, including the Agriculture Development Fund, Cooperative Enterprise Fund, and a bursary programme, to which the county had allocated Sh219.80 million this year, equivalent to 2.4 per cent of its total budget.
In Elgeyo Marakwet, the Education Fund, County Executive Car and Mortgage Loan Fund, and the MCA and Staff Car Loan and Mortgage Fund were found to be beyond their approved timelines and have since been cut off from funding.
Embu's Youth Trust Fund and Garissa’s Bursary and Emergency Funds were also listed among those no longer eligible for support. In Kajiado, the Liquor Fund’s lifespan had lapsed, while in Kakamega, the Alcoholic Drinks Control Fund is no longer active.
The latter county had set aside Sh433.50 million for county-established funds and an additional Sh100 million for emergencies in the current financial year.
Kisii County had four expired funds, including the Health Fund, the Bursary Fund and two car loan and mortgage schemes for MCAs and staff.
Nyakang’o also warned Homa Bay County that its Bursary Fund and Alcoholic Drinks Control Fund will expire by December 31 and must be renewed quickly to avoid disruptions. “This necessitates a timely review and extension of these public funds to prevent operational disruptions,” the report states.
The Controller’s report has raised questions about the failure of legal teams and county assemblies to monitor and update the legal status of these essential programmes, as required by Section 116 of the Public Finance Management Act, 2012.
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