The Constitution of Kenya (2010) established the Equalisation Fund which is allocated one half percent of nationally raised revenue, computed on the basis of the most recent audited approved accounts of revenue. The Equalisation Fund (EF) became operational in the financial year 2011/12 following the promulgation of the Constitution in 2010. The Fund is used to improve basic services that relate to water, health, roads and electricity- among others, in marginalised areas. The Constitution further entrusts the identification of marginalised areas and determination of a criteria for sharing revenues from the Equalisation Fund to the Commission on Revenue Allocation (CRA). The Commission prepared the first three-year policy in 2013, which identified fourteen marginalised counties and allocated Kshs 11.8 billion from the EF to these counties. The first policy lapsed in the FY 2016/17. This is the second policy prepared by the Commission, in pursuit of this mandate. Invoking the principle of equity, this second policy recognizes that there are pockets of extreme marginalisation even in prosperous places. Therefore, this policy adopted a new approach to identify marginalised areas. In this policy, the Commission has moved beyond identifying marginalised counties and instead, determined specific areas using sub-locations where marginalised communities live. This approach is expected to ensure that resources meant to improve services in lagging areas are properly targeted for the realization of maximum impact. In this regard, guided by the provisions of Article 204, this second policy used indicators on access to education, water, sanitation and electricity to construct an index of deprivation. This index is used to rank 7,131 sub-locations from the lagging areas to the most prosperous. A total of 1,424 sub-locations, the bottom 20 percent where about 5 million Kenyans live, have been identified for funding from the Equalisation Fund. The policy also identifies four marginalised minority communities that need to be targeted for service provision, namely; Elmolo, Makonde, Watta and Dorobo-Saleita. The policy has formulated an index for sharing the funds among the 1424 sub locations. This policy recommends the fostering of partnerships through matching funds, where appropriate, along with the involvement of county governments, local administration and beneficiary communities in the selection and implementation of projects, among other recommendations. It is the hope of the Commission that the implementation of this second policy will improve access to basic services for the bottom 20 percent and that no Kenyan will be left behind.