A Parliamentary committee has accused the Equalisation Fund Board of violating the Constitution by financing projects outside its legal mandate.
The National Assembly Finance and National Planning Committee, chaired by Molo MP Kuria Kimani, raised concerns over the misallocation of billions of shillings meant to provide water, roads, health services, and electricity in marginalised areas.
The lawmakers criticised the Board for funding projects such as cabro paving, street lighting, staff housing, and kitchen renovations, which are not among the basic services listed under Article 204 of the Constitution.
The Committee questioned why the Fund was involved in constructing classrooms—typically handled by the National Government Constituencies Development Fund (NG-CDF)—and duplicating functions of county governments.
During a meeting with the Board, MPs identified several inconsistencies in the implementation of 310 projects. Hon. Kimani cited an example of an irrigation scheme, where a five-acre project cost Sh2.6 million while a ten-acre scheme in the same area was allocated only Sh3.6 million.
“There are questionable projects like the construction of a staff house at Chalaluma Dispensary in Witu, Lamu, which cost Sh6.2 million. If projects are this arbitrary, how can we ensure value for money?” Kimani asked.
“The projects are so scattered that even if you allocate money for 10 years, the impact will still be minimal.”
Turkana South MP John Ariko questioned the credibility of the Board’s project reports. While the Board indicated a bridge project in his constituency was only 2% complete, he claimed it was already at 40%.
“This board is presenting misleading reports that cast doubt on the accuracy of its project data,” said Dr Ariko. “The Board has ignored the law and is implementing projects that were not envisioned.”
Kitui Rural MP David Mboni demanded answers on why the Fund was implementing projects best handled by the NG-CDF or that fall outside its constitutional scope.
“The Board and the Commission on Revenue Allocation have diluted the original objective of the Fund. It was created to address inequalities identified in Sessional Paper No. 10 of 1965,” Mboni said.
In response, Engineer Mohamed, appearing on behalf of the Board, said the Fund only allocates resources to projects selected by the CRA and implemented by agencies within national and county governments.
“The Equalisation Fund has no role in identifying needs. This is done by the CRA,” Mohamed said, adding that the erratic release of funds has created audit issues and a backlog of unpaid bills.
Mohamed told MPs that the Fund’s entitlement from the Treasury as of June 2025 stood at Sh80 billion, but only Sh39.89 billion had been appropriated, with just Sh15 billion released.
The meeting was adjourned after it emerged that much of the data presented by Board Chairperson Mahboub Mohammed and CEO Guyo Boru did not match the situation on the ground.
“Looking at the projects done, they are spread too thin and outside the Fund’s mandate. One is left to wonder whether this Fund has really made any impact,” Kimani said.
“If you continue to fund all sorts of projects from installing cabros to building staff houses, will the Fund serve the purpose it was created for?”
The Equalisation Fund, established under Article 204 of the Constitution, is meant to uplift the living standards in marginalised areas by funding short-term projects that improve access to food, health, water, sanitation, and electricity. The Fund is allocated 0.5 per cent of the most recent audited national revenue as approved by Parliament.
