County governments are set to receive Sh71.09 billion in additional allocations in the 2026/2027 financial year under a new law signed by President William Ruto, which also introduces quarterly reporting on actual transfers in a bid to strengthen accountability over public funds.
The President signed the County Governments Additional Allocations Bill, 2026 into law at State Lodge Eldoret in Uasin Gishu County on Monday, ahead of Mashujaa Day celebrations, increasing the additional allocations to counties by Sh425.6 million from Sh70.67 billion in the 2025/2026 financial year.
The Bill was sponsored by Senator Ali Ibrahim Roba, chairman of the Senate Standing Committee on Finance and Budget. It was published on March 16, 2026, and received its First Reading in the Senate on April 2.
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The Senate passed it with amendments on June 17, before the National Assembly also passed it with amendments on August 4. The Senate concurred with the National Assembly’s amendments on October 6, paving the way for presidential assent.
The Sh71.09 billion extra funding to counties comprises Sh56.38 billion in conditional allocations financed through loans and grants from development partners, Sh12.73 billion from the national government’s share of revenue, Sh1.83 billion in counties’ mineral royalties and Sh148.26 million from court fines imposed for violations of county legislation.
Development partner financing accounts for the bulk of the funding at about 79.3 per cent of the total additional allocations.
The law requires the Cabinet Secretary for the National Treasury to publish quarterly reports on actual transfers to county governments within 30 days after the end of each quarter.
President William Ruto assents to the County Governments Additional Allocations Bill, 2026, at Eldoret State Lodge, Uasin Gishu County on October 19, 2026.
County treasuries must also record transfers of conditional allocations from the national government in their books of account and include them in consolidated quarterly and annual financial reports.
Serious or persistent non-compliance with the law’s provisions constitutes an offence of financial misconduct under the Public Finance Management Act.
The reporting requirements are intended to strengthen oversight of the additional allocations and improve transparency in the disbursement and management of the funds.
The money will support several programmes, including the construction of county headquarters, community health promoters and allocations to county rural and urban affordable housing committees.
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Other priorities include healthcare personnel and management, agricultural value chain development, climate change resilience, drought response, natural resource management, water and sanitation, and support for devolution.
The allocations comprise conditional and unconditional funding from the national government, proceeds from development partner loans and grants, and statutory entitlements due to county governments.
The law provides for the funds to be transferred to respective county revenue funds in accordance with a payment schedule published in the Kenya Gazette by the Cabinet Secretary for the National Treasury.
Conditional additional allocations must also be included in the national government’s budget estimates and submitted to Parliament for approval.
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