The US has suspended $21m (£16m) of funding to Kenya’s ministry of health due to concerns over corruption and weak accounting procedures, the state department said.
But this amounts to a “small portion of the overall US health investment exceeding $650m annually,” it added
In response, Kenya has said it is strengthening its auditing processes.
Corruption allegations have dogged successive Kenyan governments for many years.
The health ministry itself has been accused of corruption. Last year, it was alleged that the ministry misappropriated $50m by awarding contracts to politically-connected business people for inflated amounts.
In a statement, the US said that the move is intended to ensure that “health care spending reaches those in need, and to protect US taxpayer money”.
But it stressed that “support for life-saving and essential health services” will not be not affected.
It added it was working with the ministry to improve accounting and it will restore funding if changes are made.
A statement from USAID on Monday to organisations it supports said that the suspended funding covers salaries, wages and travel expenses.
US ambassador to Kenya Bob Godec said the suspension had nothing to do with the general election in August and does not mean that US-Kenya relations are bad, the Daily Nation newspaper reports.