Mr Rotich said governors cannot directly access donor funds, including conditional grants, because the counties are not a country on their own.
On Wednesday, Mr Rotich said donors want to deal with a country, not a devolved unit.
A row is brewing over the control of donor funds after National Treasury Cabinet Secretary (CS) said governors can only access the funds through the national government.
“There are governors who want to deal with donors on their own as if counties are a country on their own,” he said during the second annual Legislative Summit, in Mombasa.
The conditional grants mainly meant to help counties deal with health, water and infrastructure, he said, can only be released through relevant ministry.
Mr Rotich dismissed claims that counties are being frustrated through little and delayed funding.
He said there has not been a lot of effort by counties to raise their own revenue resulting to cases of pending bills for projects that were budgeted for but cannot be implemented due to inadequate funds.
Instead, he said, governors were over relying on allocations from the national government yet they were collecting their own revenues.
“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.
He said the government was working on a joint legal framework with counties, to address the challenge and improve revenue collection at both levels of government.
The CS pointed out that counties 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,” he said.
Commission on Revenue Allocation chairperson, Dr Jane Kilangai said in some counties, more funds are being spent on salaries and allowances leaving little for development.