With the June 30 deadline approaching, counties have just three days to absorb the final Sh30.83 billion in funding.
The National Treasury has committed to disburse Sh 30.83 billion in outstanding equitable share allocations to county governments for May and June by Friday, June 27, 2025.
This final tranche will bring the total disbursements for the 2024/25 financial year to Sh 418.09 billion, marking full compliance with the equitable share allocation requirements.
The announcement was made during the 27th Ordinary Session of the Intergovernmental Budget and Economic Council (IBEC) chaired by Deputy President Kithure Kindiki at his official residence in Karen on Monday.
The session attended by governors, Cabinet Secretaries and senior government officials focused on strengthening intergovernmental cooperation and enhancing fiscal discipline.
DP Kindiki urged county governors to prioritise seamless collaboration between the two levels of government rather than highlighting areas of dysfunction which he warned could strain intergovernmental relations.
“The executive authority of the Government of Kenya is exercised at two levels. This authority must be exercised through mutual respect and cooperation, not through conflict and competition.Anyone perpetuating conflict is undermining the Constitution of Kenya and commits an offence,” he said.
While the disbursement of the May and June allocations was welcomed, the delay poses a challenge for counties as they have only three days before the close of this financial year on June 30 deadline to absorb the funds via the Integrated Financial Management Information System (Ifmis) as required by law.
Failure to absorb the funds within the fiscal year would result in the unutilised balance being returned to the Consolidated Fund for re-appropriation in the next financial year.
Council of Governors Chairperson Ahmed Abdullahi appealed to Treasury Cabinet Secretary John Mbadi to extend the Ifmis deadline to give counties enough time to process the funds.
“We appreciate that the funds are being disbursed but we are very close to the end of the financial year. We request that the Ifmis system remain open to allow for the full absorption of the funds,” he said.
In addition to the equitable share, the Treasury also pledged to release funds under the County Governments Additional Allocations Act (CGAAA) for the same financial year by Friday. These funds, tied to conditional grants, are vital for the implementation of key county programmes in health, agriculture, infrastructure, and other sectors.
To facilitate the effective utilisation of these funds, the Treasury and the Office of the Controller of Budget were directed to take all necessary administrative steps to expedite fund absorption. This comes in response to mounting concerns over persistent delays that have hindered county operations, including payment to suppliers and implementation of development projects.
IBEC acknowledged the disruptions caused by the delayed enactment of the 2024 County Governments Additional Allocations Bill.
In response, the Treasury was tasked with leading consultations over the next month to explore alternative legal and administrative frameworks to prevent future delays in the disbursement of conditional grants.
The Council also approved the County Governments Pending Bills Action Plan directing all 47 counties to customise and implement individual strategies to progressively reduce their stock of pending bills.
The move is aimed at rebuilding trust with suppliers many of whom have gone unpaid for extended periods and unlocking stalled services and projects.
On industrialisation, the Council noted progress in establishing 13 County Aggregated Industrial Parks and directed the swift disbursement of Sh 970 million in pending national government contributions. It also called for the finalisation of criteria to onboard 21 additional counties into the programme in the 2025/26 financial year.
