The International Olympic Committee on Thursday imposed a freeze on grants to the Kenyan Olympic committee in a move which would affect the running of national sports activities in the country.
The IOC said in a statement that it was unhappy that the Kenyan National Olympic Committee (NOCK) had failed to implement new reforms demanded after Kenya's embarrassing Rio Games appearance.
"The IOC is extremely disappointed by the outcome of the NOCK General Assembly which did not address governance issues the appropriate way," said Emmanuel Moreau, the IOC head of media relations and monitoring department.
The IOC assisted in the drafting of new laws following a national outcry over corruption and the treatment of the Kenya team at last summer's Olympics.
But after a second attempt, the new statutes failed to garner enough votes to pass at the NOCK general assembly on Wednesday, attended by officials from the IOC and the Association of National Olympic Committees of Africa.
"The IOC is now putting on hold all payments of subsidies to the NOC of Kenya until a decision of the IOC Executive Board is taken at its meeting next week," the statement said.