Public Finance Management Act

Section 1. Short title and commencement Section 1(1) This Act shall be cited as the Public Finance Management Act. Section 1(2) Spent.

Section 2. Interpretation Section 2(1) In this Act, unless the context otherwise requires— “accounting officer” means— (a) an accounting officer of a national government entity referred to in section 67 ; (b) an accounting officer of a county government entity referred to in section 148 ; (c) in the case of the Judiciary, the Chief Registrar of the Judiciary; or (d) in the case of the Parliamentary Service Commission— (i) the Clerk of the Senate in respect of the Senate; (ii) the Clerk of the National Assembly in respect of the National Assembly; and (iii) such other officer in the parliamentary service in respect of any other office in the parliamentary service as the Cabinet Secretary shall, upon resolution by the Commission, designate, within fourteen days of the resolution; “Accounting Standards Board” means the Public Sector Accounting Standards Board established under section 192 ; “appropriation” means— (a) authority granted by Parliament to pay money out of the Consolidated Fund or out of any other public fund; or (b) authority granted by a county assembly to pay money out of the relevant County Revenue Fund or out of any other county public fund; “appropriation Act” means...

Section 3. Object of this Act Section public finances are managed at both the national and the county levels of government in accordance with the principles set out in the Constitution; and

Section 4. Declaration of entities as national government entities Section 4(1) The Cabinet Secretary may, with the approval of the Cabinet and Parliament, by order in the Gazette , declare a state corporation, an authority or any other body whose functions fall under the national government to be a national government entity for the purposes of this Act. Section 4(2) A declaration made under subsection (1) shall be based on criteria prescribed by regulations . Section 4(3) The Cabinet Secretary shall, from time to time, and not less than once each year, publish in the Gazette a list of national entities declared under subsection (1). Section 4(4) The Cabinet Secretary may, from time to time with the approval of the Cabinet and Parliament, by order in the Gazette , declare that a national government entity declared under subsection (1) shall, with effect from the date of the order, cease to be a national government entity for the purposes of this Act.

Section 5. Declaration of entities as county government entities Section 5(1) A County Executive Committee member for finance may, with the approval of the county executive committee and county assembly, by order in the Gazette , declare a county corporation , an authority or any other body whose functions fall under that county government to be a county government entity for the purposes of this Act. Section 5(2) A declaration made under subsection (1) shall be based on criteria prescribed by regulations . Section 5(3) A County Executive Committee member for finance shall, from time to time, and not less than once each year, publish in the Gazette a list of the county entities declared under subsection (1). Section 5(4) A County Executive Committee member for finance may, from time to time with the approval of the county assembly, and by notice in the Gazette declare that a county government entity declared under subsection (1) shall with effect from the date of the order cease to be a county government entity for the purposes of this Act.

Section 6. Act to prevail in certain matters Section preparation and submission of budget estimates, including the time for doing so;

Section 7. Responsibilities of the National Assembly budget committee in public finance matters Section discuss and review the Budget Policy Statement and budget estimates and make recommendations to the National Assembly;

Section 8. Responsibilities of the Senate budget committee in public finance matters Section 8(1)(a) present to the Senate, subject to the exceptions in the Constitution, the proposal for the basis of allocating revenue among the Counties and consider any bill dealing with county financial matters; Section 8(1)(b) review the County Allocation of Revenue Bill and the Division of Revenue Bill in accordance with Article 218(1)(b) of the Constitution at least two months before the end of the financial year; Section 8(1)(c) examine financial statements and other documents submitted to the Senate under Part IV of this Act, and make recommendations to the Senate for improving the management of government’s public finances; and Section 8(1)(d) monitor adherence by the Senate to the principles of public finance set out in the Constitution, and to the fiscal responsibility principles of this Act. Section 8(2) In carrying out its functions under subsection (1)(a) and (b), the Committee shall consider recommendations from the Commission on Revenue Allocation, County Executive Committee member responsible for finance, the Intergovernmental Budget and Economic Council , the public and any other...

Section 9. Parliamentary Budget Office continued Section 9(1) The office known as the Parliamentary Budget Office shall continue to exist as an office of the Parliamentary Service. Section 9(2) In addition to any other criteria established by the Parliamentary Service Commission, the Budget Office shall consist of persons appointed on merit by virtue of their experience in finance, economics and public policy matters.

Section 10. Responsibilities of the Parliamentary Budget Office Section 10(1)(a) provide professional services in respect of budget, finance, and economic information to the committees of Parliament; Section 10(1)(b) prepare reports on budgetary projections and economic forecasts and make proposals to Committees of Parliament responsible for budgetary matters; Section 10(1)(c) prepare analyses of specific issues, including financial risks posed by Government policies and activities to guide Parliament; Section 10(1)(d) consider budget proposals and economic trends and make recommendations to the relevant committee of Parliament with respect to those proposals and trends; Section 10(1)(e) establish and foster relationships with the National Treasury , county treasuries and other national and international organisations, with an interest in budgetary and socio-economic matters as it considers appropriate for the efficient and effective performance of its functions; Section 10(1)(f) subject to Article 35 of the Constitution, ensure that all reports and other documents produced by the Parliamentary Budget Office are prepared, published and publicised not later than fourteen days after...

Section 11. Establishment of theNational Treasury Section 11(1) There is established, pursuant to Article 225 of the Constitution, an entity of the national government to be known as the National Treasury . Section 11(2)(a) the Cabinet Secretary ; Section 11(2)(b) the Principal Secretary ; and Section 11(2)(c) the department or departments, office or offices of the National Treasury responsible for economic and financial matters. Section 11(3) The Cabinet Secretary shall be the head of the National Treasury .

Section 12. General responsibilities of theNational Treasury Section 12(1)(a) formulate, implement and monitor macro-economic policies involving expenditure and revenue; Section 12(1)(b) manage the level and composition of public debt , guarantees and other financial obligations of government within the framework of this Act and develop a framework for sustainable debt control; Section 12(1)(c) formulate, evaluate and promote economic and financial policies that facilitate social and economic development in conjunction with other national government entities; Section 12(1)(d) mobilise domestic and external resources for financing national and county government budgetary requirements; Section 12(1)(e) design and prescribe an efficient financial management system for the national and county governments to ensure transparent financial management and standard financial reporting as contemplated by Article 226 of the Constitution: Provided that the National Treasury shall prescribe regulations that ensure that operations of a system under this paragraph respect and promote the distinctiveness of the national and county levels of government; Section 12(1)(f) in consultation with the Acco...

Section 13. Powers of theNational Treasury Section 13(1)(a) with prior notification to the entity, access any system of public financial management and control of national government entity ; Section 13(1)(b) where reasonably necessary in the execution, of its functions, access the premises of any national State Organ or other public entity and inspect the entity’s records and other documents relating to financial matters after giving notice; Section 13(1)(c) require national government entities to comply with any specified applicable norms or standards regarding accounting practices and budget classification systems; Section 13(1)(d) require any public officer in the national government to provide information and if necessary, explanations with respect to matters concerning public finance: Provided that a person providing information shall not be liable if at the time of providing the information that person, in writing, objected to providing such information on grounds that the information may incriminate him or her; Section 13(1)(e) provide any County Treasury with any information as it may require to carry out its responsibilities under the Constitution and this Act; and Sectio...

Section 14. Secondment of public officers byNational TreasurytoCounty Treasury Section 14(1) Subject to Articles 189 and 190 of the Constitution, the National Treasury may, upon request by the County Treasury , and for a period that shall be agreed, second to a County Treasury for purposes of capacity building, such number of officers as may be necessary for the County Treasury to better carry out its functions under this Act. Section 14(2) A public officer seconded to a County Treasury under subsection (1), shall be deemed to be an officer of the County Treasury and shall be subject only to the direction and control of the County Treasury .

Section 15. TheNational Treasuryto enforcefiscal responsibility principles Section 15(1) The National Treasury shall manage the national government’s public finances in accordance with the Constitution, and the principles of fiscal responsibility set out in subsection (2). Section 15(2)(a) over the medium term a minimum of thirty percent of the national and county governments budget shall be allocated to the development expenditure . Section 15(2)(b) the national government’s expenditure on wages and benefits for its public officers shall not exceed a percentage of the national government revenue as prescribed by regulations ; Section 15(2)(c) over the medium term , the national government’s borrowings shall be used only for the purpose of financing development expenditure and not for recurrent expenditure ; Section 15(2)(d) public debt and obligations shall be maintained at a sustainable level as approved by Parliament for the national government and the county assembly for county government; Section 15(2)(e) fiscal risks shall be managed prudently; and Section 15(2)(f) a reasonable degree of predictability with respect to the level of tax rates and tax bases shall be maintained,...

Section 16. National government deviation fromfinancial objectives Section 16(1) The national government may, with the approval of Parliament, deviate from the financial objectives in a Budget Policy Statement on a temporary basis where such deviation is necessitated by a major natural disaster or other significant unforeseen event. Section 16(2) If there is a change of national government, the new government may, with the approval of Parliament, deviate from the financial objectives in a Budget Policy Statement but shall not deviate from the fiscal responsibility principles . Section 16(3)(a) the reasons for and the implications of the deviation; Section 16(3)(b) proposals to address the deviation; Section 16(3)(c) the period the deviation is estimated to last; and Section 16(3)(d) the status of development projects initiated by the national government and if any project has been stopped, the reasons for doing so. Section 16(4) The National Treasury shall publish and publicise the report made under subsection (3) within fifteen days after its submission to Parliament.

Section 17. TheNational Treasuryto administer the Consolidated Fund Section 17(1) The National Treasury shall administer the Consolidated Fund in accordance with Article 206 of the Constitution. Section 17(2)(a) facilitate payment into that account all money raised or received by or on behalf of the national government; and Section 17(2)(b) pay from that National Exchequer Account without undue delay all amounts that are payable for public services. Section 17(3) The National Treasury shall ensure that the National Exchequer Account is not overdrawn at any time. Section 17(4) Where a withdrawal from the Consolidated Fund is authorised under the Constitution or an Act of Parliament for the appropriation of money, the National Treasury shall make a requisition for the withdrawal and submit it to the Controller of Budget for approval. Section 17(5) The approval of a withdrawal from the Consolidated Fund by the Controller of Budget, together with written instructions from the National Treasury requesting for the withdrawal, shall be sufficient authority for the Central Bank of Kenya to pay amounts from the National Exchequer Account in accordance with the approval and instructions prov...

Section 18. TheNational Treasuryto administer the Equalisation Fund Section 18(1) The National Treasury shall administer the Equalisation Fund in accordance with Article 204 of the Constitution. Section 18(2)(a) transfer into that Equalisation Fund all revenues payable into the Fund under Article 204(1) of the Constitution; and Section 18(2)(b) transfer from that Equalisation Fund, without undue delay, all money for purposes specified in Article 204(2) of the Constitution. Section 18(3) The National Treasury shall ensure that the Equalisation Fund Account is not overdrawn at any time. Section 18(4) Where a withdrawal from the Equalisation Fund is authorised under an Act of Parliament that approves the appropriation of money, the National Treasury shall make a requisition for the withdrawal and submit it to the Controller of Budget for approval. Section 18(5) The approval by the Controller of Budget of a withdrawal from the Equalisation Fund, together with written instructions from the National Treasury requesting for the withdrawal, shall be sufficient authority for the Central Bank of Kenya to pay amounts from the Equalisation Fund Account in accordance with the approval and instr...

Section 19. Source of theContingencies Fund Section The Contingencies Fund shall consist of monies appropriated from the Consolidated Fund by an appropriation Act in any financial year.

Section 20.Cabinet Secretaryto administer theContingencies Fund Section 20(1) The Cabinet Secretary shall administer the Contingencies Fund . Section 20(2) The permanent capital of the Contingencies Fund shall not exceed ten billion shillings or such other amount as may be prescribed by the Cabinet Secretary with the approval of Parliament. Section 20(3)(a) into that account all monies appropriated to the Contingencies Fund by an appropriation Act ; and Section 20(3)(b) from the Contingencies Fund , without undue delay, all advances made under section 21 .

Section 21. Advances from theContingencies Fund Section 21(1) Subject to section 22 , the Cabinet Secretary may make advances from the Contingencies Fund if, on the basis of the set criteria and the process and operational guidelines of Article 208(1) as prescribed in regulations approved by Parliament and the laws relating to disaster management, the Cabinet Secretary is satisfied that an urgent and unforeseen need for expenditure has arisen for which there is no specific legislative authority. Section 21(2)(a) the payment which was not budgeted for because it was unforeseen and cannot be delayed until a later financial year without harming the general public interest; and Section 21(2)(b) the event was unforeseen. Section 21(3)(a) threatens serious damage to human life or welfare; Section 21(3)(b) threatens serious damage to the environment; and Section 21(3)(c) is meant to alleviate the damage, loss, hardship or suffering caused directly by the event. Section 21(4)(a) loss of life, human illness or injury; Section 21(4)(b) homelessness or damage to property; Section 21(4)(c) disruption of food, water or shelter; or Section 21(4)(d) disruption to services, including health servic...

Section 22.Cabinet Secretaryto seek Parliamentary approval for payments made fromContingencies Fund Section 22(1) Not later than two months after a payment from the Contingencies Fund in terms of section 21 , the Cabinet Secretary shall submit to Parliament a detailed report in respect of the payment setting out the information specified in section 23 (2) and seek Parliament to approve the payment. Section 22(2) If Parliament does not sit during the period referred to in subsection (1), or is not sitting at the end of that period and the Cabinet Secretary has not sought the approval of Parliament before the end of that period, the Cabinet Secretary shall seek the approval for the payment not later than fourteen days after Parliament next sits. Section 22(3) As soon as practicable after the Parliament has approved the payment, the Cabinet Secretary shall cause an appropriation Bill to be introduced in Parliament for the appropriation of the money paid and for the replenishment of the Contingencies Fund to the extent of the amount of the payment.

Section 23. Financial statements in respect of theContingencies Fund Section 23(1) Not later than three months after the end of each financial year, the National Treasury shall prepare and submit to the Auditor-General financial statements for that year in respect of the Contingencies Fund . Section 23(2)(a) the date and amount of each payment made from that Contingencies Fund ; Section 23(2)(b) the person to whom the payment was made; Section 23(2)(c) the purpose for which the payment was made; Section 23(2)(d) if the person to whom the payment was made has spent the money for that purpose, a statement to that effect; Section 23(2)(e) if the person to whom the payment was made has not yet spent the money for that purpose, a statement specifying the reasons for not having done so; and Section 23(2)(f) a statement indicating how the payment conforms to section 21 .

Section 24. Establishment of Parliamentary Fund and other national government public funds Section 24(1) There is established a fund to be known as the Parliamentary Fund. Section 24(2) The Secretary to the Parliamentary Service Commission shall, on the directions of the Commission, open and operate such bank accounts as may be necessary for the purposes of the Parliamentary Fund. Section 24(2A)(a) Parliamentary Mortgage (Members) Scheme Fund; Section 24(2A)(b) Parliamentary Mortgage (Staff) Scheme Fund; Section 24(2A)(c) Parliamentary Car Loan (Members) Scheme Fund; Section 24(2A)(d) Parliamentary Car Loan (Staff) Scheme Fund; and Section 24(2A)(e) Parliamentary Catering Fund. Section 24(3)(a) establish procedures and systems for proper and effective management of the monies and property of the Fund; Section 24(3)(b) establish accounting procedures and systems for the Commission to properly account for the monies and property; Section 24(3)(c) superintend the expenditure of the monies of the Fund to ensure that the monies are properly accounted for; Section 24(3)(d) prepare and submit accounts for each financial year in accordance with the written law for the time being relating t...

Section 25.National Treasuryto prepare annualBudget Policy Statement Section 25(1) The National Treasury shall prepare and submit to Cabinet the Budget Policy Statement for approval. Section 25(2) The National Treasury shall submit the Budget Policy Statement approved in terms of subsection (1) to Parliament, by the 15th February in each year. Section 25(3) In preparing the Budget Policy Statement , the National Treasury shall set out the broad strategic priorities and policy goals that will guide the national government and county governments in preparing their budgets both for the following financial year and over the medium term . Section 25(4)(a) an assessment of the current state of the economy and the financial outlook over the medium term , including macro-economic forecasts; Section 25(4)(b) the financial outlook with respect to Government revenues, expenditures and borrowing for the next financial year and over the medium term ; Section 25(4)(c) the proposed expenditure limits for the national government, including those of Parliament and the Judiciary and indicative transfers to county governments; and Section 25(4)(d) the fiscal responsibility principles and financial ob...

Section 26.National Treasuryto prepare Budget Review and Outlook Paper Section 26(1)(a) actual fiscal performance in the previous financial year compared to the budget appropriation for that year; Section 26(1)(b) updated macro-economic and financial forecasts with sufficient information to show changes from the forecasts in the most recent Budget Policy Statement ; Section 26(1)(c) information on how actual financial performance for the previous financial year may have affected compliance with the fiscal responsibility principles or the financial objectives in the latest Budget Policy Statement ; and Section 26(1)(d) the reasons for any deviation from the financial objectives together with proposals to address the deviation and the time estimated to do so. Section 26(2) Cabinet shall consider the Budget Review and Outlook Paper with a view to approving it, with or without amendments, not later than fourteen days after its submission. Section 26(3)(a) submit the Paper to the Budget Committee of the National Assembly to be laid before each House of Parliament; and Section 26(3)(b) publish and publicise the Paper not later than fifteen days after laying the Paper before Parliament.

Section 27. Publication of pre- and post-election economic and fiscal reports byNational Treasury Section 27(1)(a) a pre-election economic and fiscal update not earlier than four months before the polling day for any general election; and Section 27(1)(b) a post-election economic and fiscal update not later than four months after the polling day of any general election. Section 27(2)(a) direct election expenses such as those for the Independent Electoral and Boundaries Commission for costs of elections and election materials; Section 27(2)(a)(i) direct election expenses such as those for the Independent Electoral and Boundaries Commission for costs of elections and election materials; Section 27(2)(a)(ii) indirect election expenses such as allocations to police and security forces for the election year; and Section 27(2)(a)(iii) any other expenses related to the election specified in regulations or instructions; and Section 27(2)(b) all policy decisions with material economic or fiscal implications that the national government made before the day on which the contents of the economic and fiscal updates were finalised; Section 27(2)(b)(i) all policy decisions with material economic...

Section 28. Banking arrangements for national government entities Section 28(1) The National Treasury shall authorise the opening, operating and closing of bank accounts and sub accounts for all national government entities in accordance with regulations made under this Act. Section 28(2) The National Treasury shall establish a Treasury Single Account into which all revenues received by national government entities shall be deposited and from which all payments of money to or on behalf of national government entities shall be made. Section 28(3) The Treasury Single Account shall not be operated in any manner that prejudices any entity to which funds have been disbursed. Section 28(4) An accounting officer for a national government entity shall not cause a bank account of the entity to be overdrawn beyond the limit authorised by the National Treasury or a board of a national government entity , if any. Section 28(5)(a) the Cabinet Secretary may impose by regulations ; or Section 28(5)(b) any other relevant authority may impose under the provisions of any other legislation. Section 28(6) The National Treasury shall keep complete and current records of all bank accounts for which it i...

Section 29. Management of cash at the national government level Section 29(1) The National Treasury shall establish a framework within which the national government shall manage its cash transactions. Section 29(2)(a) the National Treasury in a form and manner and relating to such periods directed by that Treasury; and Section 29(2)(b) the Controller of Budget. Section 29(3) Subject to the Constitution, the Cabinet Secretary may, notwithstanding any previous authority given, limit or suspend national government expenditure, if in the Cabinet Secretary ’s opinion, the exigencies of the financial situation render such a limitation or suspension necessary. Section 29(4) The approval of the National Assembly for any limitation or suspension under subsection (3) shall be sought within two months of the decision being made. Section 29(5) The National Treasury may invest , subject to any regulations that may be prescribed, any money kept in a bank account of the national government. Section 29(6)(a) interest received from investments made under subsection (5); and Section 29(6)(b) money received from the redemption or maturity of those investments, and from the sale or conversion of secur...

Section 30. Procurement of goods and services Section For the purposes of this Act, all procurement of goods and services required for the purposes of the national government or a national government entity is to be carried out in accordance with Article 227 of the Constitution and the relevant legislation on procurement and disposal of assets.

Section 31.Cabinet Secretaryto report on all loans Section 31(1) The Cabinet Secretary shall submit to Parliament, every four months, a report of all loans made to the national government, national government entities and county governments, in accordance with Article 211(2) of the Constitution. Section 31(2) Where either House of Parliament is canvassing a matter relating to the public debt , the Cabinet Secretary shall submit to Parliament, a report of all loans made to the national government, national government entities, and county governments, not later than seven days after receiving a request to do so from either House of Parliament. Section 31(3)(a) the names of the parties to the loan ; Section 31(3)(b) the amount of the loan and the currency in which it is expressed and in which it is repayable; Section 31(3)(c) the terms and conditions of the loan , including interest and other charges payable and the terms of repayment; Section 31(3)(d) the amount of the loan advanced at the time the report is submitted; Section 31(3)(e) the purpose for which the loan was used and the perceived benefits of the loan ; and such other information as the Cabinet Secretary may consider appr...

Section 32.Cabinet Secretaryto report on national government guarantees Section 32(1) The Cabinet Secretary shall submit to Parliament, a record of all guarantees given by the national government, not later than seven days after receiving a request to do so from either House of Parliament. Section 32(2)(a) names of the parties to the loan that is guaranteed; Section 32(2)(b) principal amount of that loan ; Section 32(2)(c) interest and other charges that are payable in respect of that loan ; and Section 32(2)(c)(i) interest and other charges that are payable in respect of that loan ; and Section 32(2)(c)(ii) terms of its repayment. Section 32(3) Not later than two months after the end of each financial year, the Cabinet Secretary shall publish and publicise a report giving details of the guarantees given by the national government during that year. Section 32(3A) Notwithstanding the provisions of subsection (2), the Cabinet Secretary shall, with respect to credit guarantees extended to private borrowers who are micro, small or medium enterprises, provide the information specified in section 59A (2) when either House of Parliament makes a request under subsection (1). [Act No. 16 of...

Section 33.Cabinet Secretaryto submit national government debt management strategy to Parliament annually Section 33(1) On or before the 15 th February in each year, the Cabinet Secretary shall submit to Parliament a statement setting out the debt management strategy of the national government over the medium term with respect to its actual liability and potential liability in respect of loans and guarantees and its plans for dealing with those liabilities. Section 33(2) The Cabinet Secretary shall ensure that the medium-term debt management strategy is aligned to the broad strategic priorities and policy goals set out in the Budget Policy Statement . Section 33(3)(a) the total stock of debt as at the date of the statement; Section 33(3)(b) the sources of loans made to the national government and the nature of guarantees given by the national government; Section 33(3)(c) the principal risks associated with those loans and guarantees; Section 33(3)(d) the assumptions underlying the debt management strategy; and Section 33(3)(e) an analysis of the sustainability of the amount of debt, both actual and potential. Section 33(4) Within fourteen days after the debt strategy paper is submi...

Section 34. TheNational Treasuryto provide Parliament with additional reports when required

Section 35. Stages in the budget process Section 35(1)(a) integrated development planning process which shall include both long term and medium term planning; Section 35(1)(b) planning and determining financial and economic policies and priorities at the national level over the medium term ; Section 35(1)(c) preparing overall estimates in the form of the Budget Policy Statement of national government revenues and expenditures; Section 35(1)(d) adoption of Budget Policy Statement by Parliament as a basis for future deliberations; Section 35(1)(e) preparing budget estimates for the national government; Section 35(1)(f) submitting those estimates to the National Assembly for approval; Section 35(1)(g) enacting the appropriation Bill and any other Bills required to implement the National government’s budgetary proposals; Section 35(1)(h) implementing the approved budget; Section 35(1)(i) evaluating and accounting for, the national government’s budgeted revenues and expenditures; and Section 35(1)(j) reviewing and reporting on those budgeted revenues and expenditures every three months. Section 35(2) The Cabinet Secretary shall ensure public participation in the budget process provided...

Section 36.Cabinet Secretaryto manage budget process at national level Section 36(1) The Cabinet Secretary shall manage the budget process at the national level. Section 36(2) Not later than the 30 th August in each year, the Cabinet Secretary shall issue to all national government entities a circular setting out guidelines on the budget process to be followed by them. Section 36(3)(a) a schedule for preparation of the budget indicating key dates by which various exercises are to be completed; Section 36(3)(b) the procedures for the review and projection of revenues and expenditures; Section 36(3)(c) key policy areas and issues that are to be taken into consideration when preparing the budget; Section 36(3)(d) procedures setting out the manner in which members of the public shall participate in the budget process; Section 36(3)(e) the format in which budget information and documents shall be submitted; and Section 36(3)(f) any other information that, in the opinion of the Cabinet Secretary , may assist the budget process. Section 36(4) Every national government entity shall comply with the guidelines, and in particular, such dates as are specified in the schedule referred to in sub...

Section 37. Submission of budget estimates and related documents for approval Section 37(1)(a) the budget estimates and other documents supporting the budget; and Section 37(1)(b) the draft Bills required to implement the national budget. Section 37(2)(a) the budget estimates excluding those for Parliament and the Judiciary; Section 37(2)(b) documents supporting the submitted estimates; and Section 37(2)(c) any other Bills required to implement the national government budget. Section 37(3)(a) submit to the National Assembly the budget estimates for Parliament, including proposed appropriations; and Section 37(3)(b) provide the National Treasury with a copy of those documents. Section 37(4)(a) submit to the National Assembly the budget estimates for the Judiciary, including proposed appropriations; and Section 37(4)(b) provide the National Treasury with a copy of those documents. Section 37(5)(a) shall ensure that members of the public are given an opportunity to participate in the preparation process; and Section 37(5)(b) may make and publish rules to be complied with by those who may wish to participate in the process. Section 37(6) The Cabinet Secretary shall submit to the Nation...

Section 38. Submission of other budget documents to the National Assembly Section 38(1)(a) a summary of budget policies including policies on revenue, expenditure, debt and deficit financing; Section 38(1)(a)(i) a summary of budget policies including policies on revenue, expenditure, debt and deficit financing; Section 38(1)(a)(ii) an explanation of how the budget relates to the fiscal responsibility principles and to the financial objectives ; and Section 38(1)(a)(iii) a memorandum by the Cabinet Secretary explaining how the resolutions adopted by the National Assembly on the Budget Policy Statement under section 25 (7) have been taken into account. Section 38(1)(b) a list of all entities that are to receive funds appropriated from the budget of the national government; Section 38(1)(b)(i) a list of all entities that are to receive funds appropriated from the budget of the national government; Section 38(1)(b)(ii) estimates of revenue allocated to, and expenditures projected from, the Equalisation Fund over the medium term , with an explanation of the reasons for those revenue allocations and expenditures and how these estimates comply with the policy developed by the Commission o...

Section 39. National Assembly to consider budget estimates Section 39(1) The National Assembly shall consider the budget estimates of the national government, including those of Parliament and the Judiciary, with a view to approving them, with or without amendments, in time for the Appropriation Bill and any other relevant Bills, required to implement the budget to be assented to by the 30 th June each year. Section 39(2) Before the National Assembly considers the estimates of revenue and expenditure, the relevant committee of the National Assembly shall discuss and review the estimates and make recommendations to the National Assembly, taking into account the views of the Cabinet Secretary and the public on the proposed recommendations. Section 39(3)(a) an increase in expenditure in a proposed appropriation is balanced by a reduction in expenditure in another proposed appropriation ; or Section 39(3)(b) a proposed reduction in expenditure is used to reduce the deficit. Section 39(4)(a) the Division of Revenue Act; Section 39(4)(b) Article 114 of the Constitution; and Section 39(4)(c) any increase in expenditure in a proposed appropriation is balanced by a reduction in expenditure...

Section 40. Submission and consideration of budget policy highlights and the Finance Bill in the National Assembly Section 40(1) Each financial year, the Cabinet Secretary shall, with the approval of Cabinet, make a public pronouncement of the budget policy highlights and revenue raising measures for the national government. Section 40(2) In making the pronouncement under subsection (1), the Cabinet Secretary shall take into account any regional or international agreements that Kenya has ratified, including the East African Community Treaty and where such agreements prescribe the date when the budget policy highlights and revenue raising measures are to be pronounced, the Cabinet Secretary shall ensure that the measures are pronounced on the appointed date. Section 40(3) Deleted by ActNo. 3 of 2024, Sch. Section 40(4) Deleted by ActNo. 3 of 2024, Sch. Section 40(5)(a) ensure that the total amount of revenue raised is consistent with the approved fiscal framework and the Division of Revenue Act; Section 40(5)(b) take into account the principles of equity, certainty and ease of collection; Section 40(5)(c) consider the impact of the proposed changes on the composition of the tax reve...

Section 41.[Deleted by ActNo. 12 of 2019, Sch.]

Section 42. Consideration by Parliament of Bills allocating revenue and additional allocations Section Parliament shall consider the Division of Revenue Bill, the County Allocation of Revenue Bill, and a County Governments Additional Allocations Bill not later than thirty days after the Bills have been introduced with a view to approving them, with or without amendments. [Act No. 17 of 2022 , s. 9(a).]

Section 43. Limited powers ofaccounting officerofnational government entityto reallocate appropriate funds Section 43(1)(a) the funds are appropriated for transfer to another government entity or person; Section 43(1)(b) the funds are appropriated for capital expenditure except to defray other capital expenditure; Section 43(1)(c) the reallocation of funds is from wages to non-wages expenditure; or Section 43(1)(d) the transfer of funds may result in contravention of fiscal responsibility principles . Section 43(2)(a) there are provisions in the budget of a program or Sub-Vote which are unlikely to be utilised; Section 43(2)(b) a request for the reallocation has been made to the National Treasury explaining the reasons for the reallocation and the National Treasury has approved the request; and Section 43(2)(c) the total sum of all reallocations made to or from a program or Sub-Vote does not exceed ten percent of the total expenditure approved for that program or Sub-Vote for that financial year. Section 43(3) Regulations made under this Act may provide for the reallocation of funds within Sub-votes or programs.

Section 44. National government to submit supplementary budget to Parliament Section 44(1) The national government shall submit to Parliament for approval, a supplementary budget in support of money spent under Article 223 of the Constitution. Section 44(2) After Parliament has approved spending under subsection (1), an Appropriation Bill shall be introduced for the appropriation of the money spent. Section 44(3) The supplementary budget shall include a statement showing how the additional expenditure relates to the fiscal responsibility principles and financial objectives .

Section 45. Appropriations to lapse if unspent at the end of the financial year Section 45(1) An appropriation that has not been spent at the end of the financial year for which it was appropriated shall lapse immediately at the end of that financial year. Section 45(2) Subject to any other legislation, where, at the end of a financial year, a national government entity is holding appropriated money that was withdrawn from the National Exchequer Account but has not been spent, it shall repay the unspent money into the National Exchequer Account and shall prepare and submit a statement of the same to the Controller of Budget.

Section 46. Overall responsibility ofCabinet Secretary Section 46(1)(a) oversee the formulation of macro-economic and financial policies of the Government; Section 46(1)(b) by agreement, assist national government entities and county governments in building capacity for efficient, effective and transparent financial management; Section 46(1)(c) where applicable, support the efforts of national government entities and county governments to avert or resolve their financial problems. Section 46(2) Within twenty-one days after the end of each month, the Cabinet Secretary shall publish in the Gazette a statement of actual revenues collected by category and net exchequer issues by the National Treasury . Section 46(3)(a) seek views from county governments on the proposed macro-economic and financial policies using the Intergovernmental Budget and Economic Council established under this Act; Section 46(3)(b) share with national government entities and county governments any findings that may assist national government entities and county governments in improving their financial management; and Section 46(3)(c) upon detecting any emerging or impending financial problems in a national gover...

Section 47. Conditions for receiving grants and donations by national government or its entities or third parties Section 47(1)(a) “donation” means a gift or a contribution; Section 47(1)(b) under which public money is paid to or used by a grant recipient; Section 47(1)(b)(i) under which public money is paid to or used by a grant recipient; Section 47(1)(b)(ii) which is intended to finance or facilitate the development of projects or delivery of services or otherwise assist the grant recipient to achieve goals that are consistent with the policy objectives of the national government; and Section 47(1)(b)(iii) under which the grant recipient is required to act in accordance with any terms or conditions specified in a grant agreement. Section 47(1)(c) “grant recipient” means the national government or a national government entity authorised to control or spend money under this Act or an incorporated or unincorporated body not otherwise authorised to control or spend money under this Act; Section 47(1)(d) “intended beneficiaries” means the people of Kenya whom the projects or public services financed by a grant are intended to benefit; Section 47(1)(e) “third party” means any other pe...

Section 48. Regulations on grant administration Section 48(1)(a) procedures to ensure that grants are spent on the basis of the integrated national development plan; Section 48(1)(b) procedures for the allocation and disbursement of the grants; Section 48(1)(c) requiring that grants be used only to finance programmes within the integrated development plan; Section 48(1)(d) the publication of transparent criteria for the allocation of grants; Section 48(1)(e) requiring specific terms and conditions in agreements to which grant recipients are subjected; Section 48(1)(f) procedures for the budgeting, financial management, accounting and reporting of grants by grants recipients; Section 48(1)(g) procedures under which a third party may be authorised to receive, control or pay public money as a grant; and Section 48(1)(h) measures to ensure that a third party authorised to receive, control or pay public money as a grant, or responsible for any other aspect of administration of a grant, is subject to the same obligations as a public officer under this Act. Section 48(2)(a) timely public disclosure to intended beneficiaries of the allocation and disbursement of grants to grant recipients;...

Section 49. Authority for borrowing by the national government Section 49(1)(a) the fiscal responsibility principles and the financial objectives set out in the most recent Budget Policy Statement ; and Section 49(1)(b) the debt management strategy of the national government over the medium term . Section 49(2) A loan may be raised either within Kenya or from outside Kenya.

Section 50. Obligations and restrictions on national government guaranteeing and borrowing Section 50(1) In guaranteeing and borrowing money, the national government shall ensure that its financing needs and payment obligations are met at the lowest possible cost in the market which is consistent with a prudent degree of risk, while ensuring that the overall level of public debt is sustainable. Section 50(2) The national government may borrow money in accordance with this Act or any other legislation, subject to the threshold specified in subsection (2A) of this section. Section 50(2A) The borrowing by the national government referred to in subsection (2) shall not exceed fifty-five percent of the gross domestic product in present value terms. Section 50(2B) Notwithstanding subsection (2A), the national government may, in exceptional circumstances, exceed the threshold set under that subsection by not more than five percent. Section 50(2C) The Cabinet Secretary shall, not later than five years from the date of the coming into force of subsections (2A) and (2B), take measures to ensure that borrowing by the national government complies with the threshold prescribed in subsection (2A...