The County Allocation of Revenue Bill, 2025
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
Pending
Executive
Pending
Final
Pending
KSh 415 Billion Equitable Share Allocation
Allocates a total of KSh 415 billion raised nationally among the 47 county governments. This baseline allocation reflects an increase of KSh 27.6 billion from the KSh 387.4 billion allocated in the 2024/2025 financial year.
Recurrent Expenditure Budgets Capped
Establishes binding budget ceilings for county government recurrent expenditures under the Second Schedule. For the FY 2025/2026, County Assemblies are capped at a collective total of KSh 38,257,392,660, and County Executives are capped at KSh 23,414,610,681.
Strict Funding Rules for Transferred Functions
Where a county government transfers a function to the National Government under Article 187 of the Constitution:
- The county executive and National Government must jointly determine the cost of the function.
- The county assembly must appropriate funds for the function, which cannot be less than the amount allocated in the preceding financial year.
- National government entities receiving these funds must submit quarterly performance reports to the Senate and the respective county assembly.
Auditing of Devolved Functions
Mandates the Auditor-General to prepare and submit a special financial and non-financial audit report on any entity discharging transferred devolved functions to both the Senate and the respective county assembly within three months after the end of the financial year.
Bill No.
Senate Bills No. 9
Gazette No.
Supplement No. 95
Sponsor
Ali Ibrahim Roba
Background
The County Allocation of Revenue Bill, 2025 is prepared in fulfillment of Article 218(2) of the Constitution of Kenya and Section 191(5) of the Public Finance Management Act, 2012. The primary objective of the Bill is to share KSh 415 billion among the 47 counties for the 2025/2026 financial year. This allocation is equivalent to 21.6 percent of the last audited and approved actual revenues raised nationally of KSh 1,920,434 million for the financial year 2021/2022, which exceeds the 15 percent minimum threshold mandated under Article 203(2) of the Constitution.
Key Amendments
- Equitable Sharing Formula: Allocations are distributed using the approved Fourth Basis horizontal revenue sharing formula, which applies the following parameters:
- Population (45%)
- Poverty Index (12%)
- Geographical Size Index (8%)
- Basic Share Index (35%)
- Recurrent Expenditure Ceilings: Outlines specific spending limits for each county’s assembly and executive body. The combined ceilings for all counties limit County Assembly recurrent expenditure to KSh 38.26 billion and County Executive recurrent expenditure to KSh 23.41 billion.
New Obligations
- County Treasury Reporting: County treasuries are required to reflect all national government transfers separately in their County Finance Bills and books of accounts. They must submit quarterly and annual consolidated reports detailing actual transfers in the format prescribed by the Public Sector Accounting Standards Board or the National Treasury.
- Cabinet Secretary Mandate: The Cabinet Secretary for Finance must publish a monthly report in the Gazette showing the actual transfers of allocations made to county governments.
- Transferred Function Accountability: National government entities managing transferred county functions must provide quarterly status updates to the Senate and county assemblies.
Penalties
- Financial Misconduct: Section 9 of the Bill stipulates that any serious or persistent non-compliance with its provisions constitutes a financial offense under the Public Finance Management Act (Cap. 412A).
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