The sharing of a Sh4 billion World Bank loan was behind delays by the Treasury in releasing cash to counties that froze salaries and payments to suppliers.
Including the money in a law approved on Thursday by President Uhuru Kenyatta has unlocked Sh77.4 billion due to the 47 devolved units.
The Treasury had delayed giving the money following contradictions in the law passed by the Senate and that was approved by Mr Kenyatta before the August 8 elections that failed to allocate the Sh4 billion to the counties, tying Treasury hands in the release of the cash.
“The principal Act is amended by deleting the Third Schedule and substituting therefore the following new schedule,” read the amendment Bill sponsored by Senate Majority Leader Kipchumba Murkomen.
The new law includes the Sh4 billion grant from the World Bank for strengthening capacity for smooth operation of the devolved system of government that started in 2013.
The money is used to finance five key core areas of public finance management, human resource, planning and monitoring, civic education as well as devolution and intergovernmental relations.
Counties received Sh68.27 billion in a similar period last year, underlining the cash crunch in the regional units.
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