The Commission on Revenue Allocation has proposed an allocation of Ksh. 458.94 billion to county governments as part of efforts to ensure equitable sharing of resources between the national and devolved levels of government during the 2026 Budget Policy Statement review.
Speaking before the Budget and Appropriations Committee, the commission, led by chairperson Mary Wanyonyi Chebukati, explained that the proposed county allocation is anchored on projected national revenue growth.
She stated that the FY 2026/27 revenue is expected to reach Ksh. 2,901.9 billion, up from Ksh. 2,744.4 billion projected in the FY 2025/26 period, representing an anticipated increase of Ksh. 157.5 billion in total revenue collections.
During the session, committee chairperson Samuel Atandi sought clarity on the methodology used by the commission to arrive at the proposed allocation, questioning the basis of the substantial figure recommended for counties.
The commission argued that increasing county allocation by only Ksh. 5.0 billion compared to the proposed Ksh. 152.5 billion increment for the national government would create an imbalance in resource sharing.
According to the commission, the proposed allocation also considers the service delivery obligations assigned to county governments under the devolved governance system.
The commission further recommended that the national government should enter into intergovernmental agreements when budgeting for devolved functions at the national level to ensure that projects are fully completed and operationalized.
In a separate presentation, the Office of the Auditor General (Kenya), represented by Auditor-General Nancy Gathungu, raised concerns over its proposed Ksh. 8.776 billion allocation under the Budget Policy Statement framework.
The audit office warned that the allocation leaves a funding deficit of approximately Ksh. 2.311 billion, a shortfall that could limit the office’s ability to conduct audits across its mandate covering more than 12,000 entities.
The funding gap is also expected to affect auditing operations in newly established institutions under the office’s jurisdiction, including Level 2 and Level 3 hospitals and Technical and Vocational Education and Training (TVET) institutions.
The committee is now set to scrutinize the submissions from both the CRA and the Auditor General’s office before preparing a report for parliamentary consideration to guide the final approval of the country’s fiscal framework.
