The process of revenue sharing in Kenya is a structured approach designed to allocate financial resources between the national government and the 47 county governments. This process ensures that both levels of government have the necessary funds to carry out their respective functions, as mandated by the Constitution of Kenya.  

An overview of how the revenue-sharing process works is as follows: 

1. Revenue Collection 

Revenue is collected by both the national and county governments through various means such as taxes, levies, fees, and grants. This revenue is then pooled into a central account known as the Consolidated Fund (CRF). 

2. Division of Revenue Act (DORA) 

Each financial year, the Division of Revenue Act (DORA) is introduced in Parliament. This Act determines the division of the total revenue collected between the national government and county governments. 

The Act is based on recommendations from the Commission on Revenue Allocation (CRA), which considers factors like national interests, debt obligations, the needs of marginal areas, and the national economy. 

3. Equitable Share Allocation 

The revenue is first divided into two portions: the share for the national government and the share for county governments (equitable share). The national government uses its share to finance its functions and obligations, while the counties receive their share to fund devolved functions. 

4. County Allocation of Revenue Act (CARA) 

After the overall share for county governments is determined, the County Allocation of Revenue Act (CARA) is passed. This Act outlines how the county governments' share is further distributed among the 47 counties. 

The allocation is done using a revenue-sharing formula, which takes into account various factors such as population (45%), equal share (20%), poverty levels (18%), land area (8%), fiscal responsibility (2%), development factor (1%), and urban services (1%). 

5. Senate Approval 

The revenue-sharing formula must be approved by the Senate, which is responsible for protecting the interests of counties and ensuring fair distribution. 

The Senate debates and, if necessary, revises the formula before approving it. The formula is used for a set period and can be reviewed periodically. 

6. Disbursement of Funds 

Once the Division of Revenue Act and the County Allocation of Revenue Act are approved, funds are disbursed to the counties according to the agreed formula. 

Counties use these funds to finance various services and development projects, such as healthcare, education, and infrastructure. 

7. Monitoring and Accountability 

The use of allocated funds is monitored by various oversight bodies, including the Auditor-General, the Controller of Budget, and county assemblies, to ensure transparency and accountability in how public funds are utilized. 

Counties are required to submit financial reports detailing how the funds were spent, and any cases of mismanagement are subject to legal and administrative action. 

8. Dispute Resolution 

In cases where there are disagreements between the Senate and the National Assembly over the division of revenue, a mediation committee is formed to resolve the dispute. 

Any unresolved disputes may delay the disbursement of funds to counties, affecting service delivery. 

9. Review and Adjustments 

The revenue-sharing formula and the allocation process are reviewed periodically to address changing socio-economic conditions, population growth, and emerging needs. 

The CRA regularly assesses the formula to ensure it remains relevant and effective in promoting equitable development across Kenya. 

This process is vital to the functioning of Kenya's devolved system of government, ensuring that all levels of government are adequately funded to fulfill their mandates and serve the population effectively.