Treasury Secretary warns governors over dealing with foreign donors saying devolved units are not countries.
He also criticised what he termed as little effort by the counties to raise their own revenue to finance projects.
Rotich says devolved units are also struggling to meet their financial obligations due to corruption.
A row is brewing over control of donor funds after a Cabinet Secretary said County Governors can only access the cash through the national government.
Treasury Secretary Henry Rotich said the county heads cannot directly access the resources because the regions are not countries, adding that donors want to deal with a State and not a devolved unit.
"There are governors who want to deal with donors on their own as if counties are a country on their own," he said Wednesday during the annual legislative summit in Mombasa.
Mr Rotich dismissed claims that counties are being frustrated through limited disbursement and delayed funding to the devolved units.
Over-reliance on central govt
He also criticised what he termed as little effort by the counties to raise their own revenue, noting that those trying were also failing to meet their set projections resulting in pending bills for projects that were budgeted for but cannot be implemented due to inadequate funds.
"We have over relied on the money coming from the centre yet county governments must also raise funds from their own counties to finance their functions," Mr Rotich said.
The Treasury boss said the State was working on a joint legal framework with counties to address the challenge and improve revenue collection at both levels of government.
He pointed out that the devolved units were also struggling to meet their financial obligations due to corruption.
"Leaking revenue is still an issue. All money raised must go to the County Revenue Fund for budgeting before being used...spending at source is a dangerous thing. It is illegal and will create a problem," Mr Rotich warned.
