KABARAK UNIVERSITY

LAW SCHOOL
NAME: AITH JEROP
REG NO: LAW/M/1814/09/23
UNIT NAME: DEVOLUTION LAW
UNIT CODE: KLS 313
MEMORANDUM
To: Council of Governors
from: Faith Jerop, law student
Date:30th November 2025
Policy Assessment of Accountability and Financing under Kenya’s Devolved System of
Governance (2010–2025): A Case Study of Baringo County

1.1 Executive Summary

This memorandum presents an assessment of accountability and financing mechanisms under
Kenya’s devolved system of governance, with a focus on Baringo County. It aims to evaluate
progress made between 2010 and 2025, identify challenges in fiscal management, and
recommend strategies to strengthen transparency, efficiency, and public trust in local
governance. This memo also focuses on the 2010–2025 period, analysing how accountability
and financing have evolved in Baringo County as a microcosm of national trends. Baringo, a
county in the arid and semi-arid lands (ASAL) region, illustrates both the promise and pitfalls
of devolved governance—particularly the tension between fiscal dependency and the pursuit
of development and accountability.

2.1 Background and context

Kenya’s 2010 Constitution introduced devolution as a fundamental restructuring of state
power and the distribution of resources. Chapter Eleven established county governments to
promote democratic and accountable exercise of power, foster equitable resource allocation,
and enhance national unity through self-governance. Article 174 of the Constitution provides
that the key objectives of devolution are to promote equity, social and economic
development, and provide proximate, easily accessible services. Devolution replaced a
historically centralized system that perpetuated regional inequality and marginalization.
The Kenyan Constitution requires that counties receive at least 15% of nationally collected
revenue, allocated through equitable shares, conditional grants, and equalization funds. The
Commission on Revenue Allocation (CRA) recommends revenue sharing formulas, while
the Controller of Budget (CoB) oversees budget execution by authorizing withdrawals from
county revenue funds and reporting to Parliament on fund usage. The CoB also manages
the County Revenue Fund and ensures the disbursement of equalization funds to
marginalized counties. The Office of the Auditor-General (OAG) audits how county
governments use public resources and reports to Parliament or county assemblies on the
legality and efficiency of fund utilization. The Senate monitors the budget to ensure
transparency, fairness, and accountability in county financial management.

Accountability and financing lie at the heart of devolution’s success. Accountability

guarantees transparency and citizen trust, while adequate and predictable financing sustains
local development and service delivery. However, devolution has revealed persistent
challenges in financial discipline, transparency, and intergovernmental coordination.
3.1 Accountability in Kenya’s Devolved Governance
(a) Strengths
Devolution has expanded the mechanisms for transparency and citizen participation. County
Assemblies exercise oversight over executives through budget approvals, motions, and the
scrutiny of audit reports. Article 201 of the Constitution enshrines principles of openness and
accountability in financial management, while the Public Finance Management Act (PFMA,
2012) operationalizes these norms
At the institutional level, external audits conducted by the Auditor-General have been
instrumental in exposing misuse of public funds and enhancing public scrutiny. For instance,
annual county audit reports between 2013 and 2023 reveal gradual improvement in record-
keeping and compliance with procurement regulations. The Senate’s County Public Accounts
and Investments Committee (CPAIC) has further strengthened horizontal accountability by
interrogating governors and county finance executives.
Citizen engagement and the ability to hold local government accountable is at the core of
normative arguments about the benefits of devolution, particularly regarding service delivery.
Devolution involves a set of institutional changes that bring about shifts in the accountability
relationship between citizens and the state. Decentralization, the political and economic
literature argues, leads to closer proximity of the citizen to the elected official, more and
better information and increased political competition, all of which results in greater
accountability and allocative efficiency of resources to meet citizen needs (World Bank,
2009)
Citizen participation—through County Budget and Economic Forums (CBEFs) and public
hearings—has also deepened accountability. In counties such as Makueni and Nyandarua,
participatory budgeting has produced tangible results in transparency and trust, setting
precedents that Baringo and others have sought to emulate
(b)Weaknesses
Despite these gains, accountability remains uneven and often politicized. Weak enforcement
of audit findings persists; while OAG routinely identifies irregular expenditures, few counties
face substantive sanctions. Political patronage between governors and county assemblies
undermines checks and balances, with oversight motions sometimes used as tools of coercion
rather than genuine accountability.
In Baringo County, audit reports (OAG, 2018–2023) have consistently cited issues such as
unsupported expenditures, irregular procurements, and weak internal audit capacity. Limited
budget transparency and public disclosure of financial data further constrain citizens’ ability
to demand accountability. Additionally, conflict between the executive and assembly over
resource allocation—especially ward development funds—has disrupted fiscal discipline.
Intergovernmental oversight is also fragmented. The Ethics and Anti-Corruption Commission
(EACC) investigates graft, but overlapping mandates with OAG and Senate committees delay
enforcement. Capacity deficits in county treasuries—particularly in internal audit and
procurement management—exacerbate inefficiency and limit preventive oversight.
(c)Emerging issues
Between 2020 and 2025, digitalization of fiscal management systems has introduced new
accountability opportunities and risks. The adoption of the Integrated Financial Management
Information System (IFMIS) at county level has improved traceability of transactions, but
system outages and limited technical capacity have constrained full utilization. Moreover, the
COVID-19 pandemic (2020–2021) exposed weaknesses in emergency procurement
oversight, as rapid spending bypassed standard accountability procedures.
Overall, Kenya’s devolved accountability framework remains normatively strong but
institutionally weak. The challenge lies in translating constitutional ideals into operational
discipline across all counties.
4.1 Financing in Kenya’s Devolved Governance
a. Strengths
Fiscal decentralization has improved equity in resource distribution and enabled counties to
plan according to local priorities. The CRA’s revenue allocation formula—based on
population, poverty, land area, and fiscal effort—has facilitated more balanced regional
development.
Counties now enjoy greater autonomy in budget formulation under the PFMA (2012),
allowing them to allocate resources to health, agriculture, and infrastructure. Conditional
grants such as the *Road Maintenance Levy Fund and DANIDA health support have
supplemented equitable share transfers. According to the Controller of Budget (2024),
counties have collectively improved absorption of development funds to above 70% in recent
years, a marked improvement from the early devolution years.

b. Weaknesses
Despite these strides, financing remains the Achilles’ heel of devolution. County governments
remain heavily dependent on national transfers—over 85% of their budgets derive from
equitable share allocations. This dependency makes them vulnerable to delayed
disbursements from the National Treasury, which disrupt service delivery and increase
pending bills.
Baringo County’s experience mirrors this pattern. In FY 2022/23, delayed transfers led to
wage arrears and stalled road projects. The county’s own-source revenue (OSR) has stagnated
at less than KSh 200 million annually, far below potential. Weak revenue collection systems,
narrow tax bases, and leakages in local revenue administration persist.
Financial mismanagement also undermines fiscal sustainability. Counties allocate a
disproportionate share of their budgets to recurrent expenditure—mainly salaries and
operations—leaving less than 30% for development. In Baringo, the 2023 budget indicated
that 69% of total expenditure went to recurrent costs. Accumulated pending bills—over KSh
2.3 billion as of 2024 (CoB, 2024)—have constrained future spending.
Further, the intergovernmental fiscal transfer framework lacks predictability. Political
disagreements between the National Assembly and Senate over the Division of Revenue Bill
(e.g., 2019–2020 standoff) delayed county operations. Without fiscal discipline and
predictable transfers, counties face liquidity crises that weaken accountability and service
delivery.
c. Emerging Issues
Recent policy debates have focused on raising the counties’ share of national revenue to 35%,
as proposed under the Building Bridges Initiative (BBI, 2020). While increased funding could
enhance service delivery, it must be accompanied by stronger fiscal controls. Counties are
also exploring *Public-Private Partnerships (PPPs) and climate finance mechanisms for local
infrastructure and resilience programs.

Digital revenue collection—through e-payment systems like Baringo’s e-revenue platform—

offers new opportunities to seal leakages and increase OSR. However, the success of such
innovations depends on political goodwill and administrative capacity.
5.1. Case Study: Baringo County
Baringo County, located in Kenya’s Rift Valley, provides a representative case of both the
opportunities and challenges of devolution. Characterized by vast geography, pastoral
livelihoods, and recurring insecurity, Baringo’s fiscal landscape reflects the broader dynamics
of Kenya’s devolved financing and accountability.
Since 2013, the county has made significant investments in health, road, and water sectors
through devolved funding. Development indicators—such as access to healthcare and school
enrollment—have improved modestly. The introduction of digital revenue collection in 2021
helped to reduce leakages, while citizen participation forums have enhanced transparency in
project prioritization.
However, persistent fiscal indiscipline undermines progress. Audit reports cite cases of
irregular procurement, unsupported expenditures, and unaccounted assets. Recurrent drought
emergencies and inter-community conflicts divert funds from development to relief spending.
The Auditor-General’s report (2023) flagged Baringo for non-compliance with procurement
laws and incomplete projects worth over KSh 500 million.
Moreover, the county’s dependency on national transfers exposes it to fiscal shocks. In FY
2023/24, delayed disbursements caused prolonged salary arrears, heightening tensions with
public sector unions. Despite these challenges, Baringo’s emerging adoption of e-governance
tools and citizen budget forums suggests a gradual improvement trajectory if supported by
stronger fiscal oversight and predictable financing.
6.1 Recommendations
1. Strengthen Audit Enforcement and Oversight
Empower the Office of the Auditor-General and Senate CPAIC with binding enforcement
authority over audit recommendations. Institute administrative sanctions for county officials
implicated in irregular [Link] county-level Audit Action Committees to
monitor compliance.
2. Enhance Fiscal Discipline and Predictability
The National Treasury should guarantee timely disbursement of equitable share to prevent
service disruption. Introduce medium-term expenditure frameworks linking fiscal transfers to
performance outcomes.
3. Expand Own-Source Revenue (OSR)
Baringo County should diversify revenue streams through digitized collection systems,
property valuation, and tourism levies. Provide capacity-building support to County Revenue
Boards for enforcement and innovation.
4. Institutionalize Public Accountability Mechanisms
Strengthen citizen oversight through participatory budgeting and regular publication of
quarterly budget implementation reports. Enforce Section 137 of the PFMA mandating
operationalization of County Budget and Economic Forums (CBEFs).
5. Promote Intergovernmental Fiscal Coordination
Revitalize the Intergovernmental Budget and Economic Council (IBEC) as a platform for
resolving transfer disputes. Develop a uniform framework for conditional grants to enhance
accountability for sectoral performance.
6. Build County Capacity for Financial Management
Invest in training of internal auditors, accountants, and procurement officers. Adopt
performance-based contracts for county finance officers to incentivize compliance.
These reforms collectively aim to consolidate Kenya’s gains from devolution while ensuring
fiscal sustainability and public trust.
7.1Conclusion
Devolution has reshaped Kenya’s governance architecture by empowering counties such as
Baringo to design and implement local development priorities. Yet, the twin challenges of
weak accountability and inadequate financing threaten to erode its transformative promise.
The 2010–2025 period has demonstrated both the resilience and fragility of devolved fiscal
systems—resilience in expanding local democracy, fragility in sustaining fiscal prudence.
Strengthening audit enforcement, enhancing local revenue mobilization, and improving fiscal
predictability remain the cornerstone reforms needed to entrench accountability and
efficiency. The Council of Governors, in collaboration with national oversight institutions,
must champion these reforms to ensure that devolution fulfills its constitutional mandate:
equitable development through transparent, accountable, and financially sustainable
governance.
Annotated Bibliography
1. State Department for Devolution, Office of the Deputy President, Policy on Devolved
System of Governance (Government of Kenya, January 2024)
 [Link]
DRAFT-POLICY-21012024_0.pdf
his policy document outlines the strategic framework for advancing devolution in
Kenya as mandated by the 2010 Constitution. It reviews achievements and challenges
in the first decade of implementing devolved governance and articulates policy
objectives aimed at enhancing service delivery, equity, and participatory governance
at the county level. The document also highlights the need for more effective
intergovernmental relations, resource allocation reforms, and legal updates to meet
emerging socio-economic challenges. It serves as a critical reference for
understanding Kenya’s devolved governance and forms part of ongoing institutional
reforms.
2. Office of the Auditor-General, Auditor-General’s Report on County Governments Revenue
Funds 2022/2023 (Nairobi: Office of the Auditor-General, July
2024) [Link]
[Link]
This report presents the audit findings of revenue funds for all 47 counties in Kenya for the
2022/2023 financial year. The Office of the Auditor-General, mandated by Article 229 of the
Constitution, evaluates the accountability, transparency, and proper management of devolved
government resources. The report highlights variations in revenue performance, compliance issues,
and governance challenges faced by county governments. It is essential for research into fiscal
management, public finance oversight, and governance within Kenya's devolved system.
[Link] of the Auditor-General, Auditor-General’s Report on County
Governments Revenue Funds 2022/2023 (Nairobi: Office of the Auditor-
General, July
2024) [Link]
[Link]

This report details the audit findings for all 47 county governments in Kenya for
the 2022/2023 financial year. It highlights the role of the Auditor-General in
exposing misuse of public funds, improving record-keeping, and enhancing
public scrutiny. The report is essential for understanding the institutional
mechanisms that promote transparency and accountability in devolved
governance.

4 Devolution Secretariat, Policy on Devolved System of Governance (Nairobi:

Devolution Secretariat, 2023) [Link]

This policy document outlines the framework for accountability in Kenya’s

devolved system. It emphasizes the importance of monitoring, evaluation, and
citizen engagement forums as tools for transparent and efficient governance.
The policy also highlights the role of empowered oversight institutions and
independent audits in strengthening accountability at the county level.

5. Green Africa Foundation, Citizen Engagement and Accountability in

Kenya (Nairobi: Green Africa Foundation,
2023) [Link] accessed 13 November 2025.
This report discusses the centrality of citizen engagement in holding local
governments accountable under devolution. It highlights constitutional
requirements for public participation and the right to access information as key
mechanisms for enhancing accountability. The report provides practical
examples of how citizen forums and consultations have improved transparency
and trust in counties like Makueni and Nyandarua.

6. Africa Portal, Social Accountability in Devolved Governance (Johannesburg:

Africa Portal, 2015) [Link]

This article analyzes the effectiveness of social accountability mechanisms in

Kenya’s devolved governance. It discusses the constitutional provisions for
county governments and the role of both executive and legislative arms in
revenue management. The report emphasizes the need for institutionalizing
social accountability to ensure sustainable and effective governance.

7. Office of the Auditor-General, Auditor-General’s Report on County Governments Revenue

Funds 2022/2023 (Nairobi: Office of the Auditor-General, July 2024)
[Link]
[Link]

This report highlights persistent weaknesses in accountability within Kenya’s

devolved governance system. Despite routine audits exposing irregular
expenditures and governance lapses, enforcement remains weak with few
sanctions against erring counties. Political interference often undermines
oversight functions, with county assemblies hampered by patronage and
coercion. Specific counties such as Baringo exhibit recurring audit issues
including unsupported expenditures and poor procurement controls. The report
notes gaps in budget transparency and public disclosure, limiting civic
participation in accountability efforts. Fragmented intergovernmental oversight,
overlapping mandates between the Ethics and Anti-Corruption Commission,
Office of the Auditor-General, and Senate committees, as well as capacity
deficits in county treasury functions, further weaken the accountability
framework. This source provides critical empirical evidence of the systemic
challenges affecting fiscal discipline and governance in Kenya’s county
governments, underscoring the need for stronger enforcement and institutional
capacity building.