Several county governments could soon be barred from issuing bursaries to needy students, empowerment funds to special groups and car loans or mortgages to their staff.
This follows revelations that most of the public funds enabling counties to disburse such benefits have either expired or are on the verge of expiry.
According to the latest report by the Controller of Budget (CoB), Margaret Nyakang’o, the lifespan of funds in at least 28 counties will lapse by the end of the year. By law, such funds have a maximum operational period of 10 years.
Nyakang’o has now raised the alarm, urging counties to urgently extend the lifespans of their existing funds or establish new ones to avoid disruption.
Section 116 of the Public Finance Management (PFM) Act, 2012 permits counties to create additional public funds, provided they are approved by both the county executive committee and the county assembly.
Regulation 197(1)(i) of the PFM (County Governments) Regulations, 2015 further specifies that such funds can only exist for up to 10 years unless the county assembly formally extends the period.
These regulations have allowed counties to establish funds such as the Education Fund, Biashara Fund, Cooperative Fund, and Car Loan and Mortgage Fund. However, unless extended, they automatically expire after 10 years.
The CoB’s 2024-25 Budget Implementation Review Report noted that at least 45 county fund legislations have already lapsed or are nearing expiry.
Counties affected include Bomet, Bungoma, Busia, Elgeyo Marakwet, Embu, Homa Bay, Isiolo, Kajiado and Kakamega.
Others are Kiambu, Kilifi, Kirinyaga, Kisii, Kisumu, Kitui, Machakos, Mandera, Marsabit, Migori and Murang’a,
Also affected are Nakuru, Narok, Nyamira, Trans Nzoia, Turkana, Uasin Gishu, Vihiga and Wajir.
In Bomet, the County Assembly Car Loan and Mortgage Fund, which was established in 2014, has since expired.
For Bungoma county, the Youth Women Fund is expiring at the end of this year.
The COB further reported that the Busia Agriculture Development Fund, the County Assembly Revolving Fund and the County Executive Revolving Fund have since expired.
Interestingly, during the examination report by the Senate County Public Investment and Special Funds committee, it was found that the Busia County Agriculture Development Fund has loans that were advanced to farmers and employees and have not been recovered.
The Busia county government is staring at a loss of Sh130 million after it offered loans to some of its employees and cooperative societies.
The report further lists the Kisii County Bursary Fund, Health Fund, MCAs’ Car Loan and Mortgage and Staff Car Loan and Mortgage Fund, as all having elapsed. The funds were established in 2014.
In Marsabit, the Enterprise Fund, Car Loan Executive, Executive Mortgage and County Assembly Car Loan Mortgage Fund members have since elapsed since they were all established in 2014.
In Turkana county, the Biashara Fund, County Youth and Women Empowerment Fund, County Cooperatives Enterprise and Development Fund and County Assembly Car Loan and Mortgage Scheme Fund members have all elapsed, sinking with them millions of taxpayers’ shillings.
The Turkana county government has been unable to recover loans worth more than Sh500 million advanced to women, youth and employees of the county dating back more than four years ago.
In Narok, the County Bursary Management Fund needs to be extended or established anew.
In Trans Nzoia, the Nawiri Fund has expired. In Vihiga, the Education Fund needs to be extended, while in Wajir, the County Revolving Fund has expired.
In Kakamega county, the County Alcoholic Drinks Control Fund, the County Assembly Members’s Car Loan and Mortgage Fund have elapsed, while in Kiambu, the County Executive Mortgage and Car Loan Fund has expired.
