Controller of Budget Margaret Nyakang’o has raised concern over persistent weaknesses in the implementation of key public finance and health financing laws by county governments, warning that the gaps continue to undermine accountability and prudent use of public resources for service delivery.
Nyakang’o‘s Monitoring and Evaluation Report on County Governments’ Budget Implementation for the 2025/26 financial year, following monitoring visits conducted across all 47 counties assessment found that despite the enactment of the Facilities Improvement Financing (FIF) Act, 2023 to enhance the financial autonomy of public health facilities, several counties have yet to fully operationalise the law.
“The Facilities Improvement Financing Act was intended to strengthen health financing, improve accountability and enable public health facilities to retain and utilise their own revenue. However, our assessment found that several challenges continue to hinder its full implementation, undermining the objectives of the Act,” Nyakang’o said.
She noted that several county governments had not enacted county-specific legislation, regulations and policy frameworks necessary to operationalise the law.
“County governments should expedite the development, approval and implementation of county legislation and accompanying regulations to provide a clear legal and operational framework for the Facilities Improvement Financing Act. This will strengthen governance, accountability and the effective utilisation of facility improvement funds,” she said.
The Controller of Budget also expressed concern over inadequate awareness among health facility managers regarding statutory financial reporting obligations.
“Our assessment established that many Facility In-Charges have not been adequately sensitised on the financial reporting requirements under the Facilities Improvement Financing Act. County Treasuries and County Health Departments should implement structured capacity-building programmes to ensure compliance with reporting timelines,” Nyakang’o said.
The report also highlights governance concerns surrounding County Public Funds established under the Public Finance Management Act where the COB noted that several counties, including Kisumu, Baringo, Bomet, Embu, Taita Taveta and Machakos, continue operating public funds whose legally approved tenure has already expired.
“County Executive Committee Members responsible for Finance should urgently seek the necessary approvals to renew or wind up County Public Funds whose legal tenure has lapsed in accordance with the Public Finance Management Act,” she said.
She further warned that failure by administrators of County Public Funds to submit quarterly financial reports to the Controller of Budget weakens oversight and accountability.
“Quarterly financial reports are critical in enabling effective monitoring of County Public Funds and assessing compliance with approved budgets. County Executive Committee Members responsible for finance should ensure fund administrators comply fully with the reporting requirements under the Public Finance Management Act,” Nyakang’o said.
The Controller of Budget said the monitoring exercise was conducted to assess compliance with public finance laws, evaluate governance structures in county institutions and determine the status of implementation of projects funded in previous financial years.
The report also assessed implementation of the Facilities Improvement Financing Act, procurement of medical supplies, governance of municipalities and county corporations, county public funds, banking arrangements and projects financed under the Equalisation Fund.
Nyakang’o said the findings are intended to guide county governments in strengthening financial management, improving accountability and ensuring efficient implementation of county budgets.
