THE PUBLIC FINANCE MANAGEMENT (AMENDMENT) BILL, 2023
Status Timeline
Proposed
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Public Review
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Debate
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Executive
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Final
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New Committee to Coordinate County Revenue Systems
Establishes a Revenue Collection System Committee consisting of the Cabinet Secretary, the Principal Secretary for Devolution, the Controller of Budget, the Commissioner General of the Kenya Revenue Authority, and two members nominated by the Council of Governors. The committee is given nine months to develop an integrated county revenue system designed to secure data, prevent fraud, and ensure transparent reporting.
Mandatory Implementation and Quarterly Reporting
Requires all county governments to adopt and implement the newly developed integrated county revenue system within three months of its completion. County Treasuries must subsequently submit quarterly progress reports to their respective County Assembly, the Senate, and the Controller of Budget.
Guaranteed Funding Levels for Transferred Functions
Introduces statutory protections under Sections 191F and 191G ensuring that when a function is transferred between the national and county governments, the funding allocated for its implementation must not be less than the amount appropriated for it in the preceding financial year.
Auditor-General to Conduct Special Annual Audits
Mandates the Auditor-General to prepare a special audit report examining both the financial and non-financial performance of any entity managing a transferred government function. This audit must be compiled within three months of the end of each financial year and submitted to the Senate and the respective legislative assembly.
Bill No.
Bill No. 40 of 2023
Gazette No.
Supplement No. 160 of 1st September, 2023
Background
The Public Finance Management (Amendment) Bill, 2023 addresses systemic gaps in county revenue administration and the funding of transferred functions under Article 187 of the Constitution of Kenya. It seeks to harmonize revenue systems across counties to curb leakages, while establishing clear, enforceable fiscal rules when national or county governments hand over executive responsibilities to one another.
Key Amendments
- Revenue Collection System Committee (Section 160A): A new multi-agency committee is formed to design, develop, and coordinate a secure, integrated county revenue management system. It must ensure the system maintains data accuracy, protects privacy, prevents fraud, and allows for separate accounting.
- Establishment of Part VA (Funding Transferred Functions): Outlines specific legal guidelines to manage funds when duties are transferred. Section 191F manages transfers from the National Government to County Governments, while Section 191G manages transfers from County Governments to the National Government.
New Obligations
- County Government Adoption: Counties must adopt the integrated revenue system within three months of its development by the committee.
- County Treasury Reporting: Treasuries must submit quarterly status updates on the system's integration to the Senate, Controller of Budget, and local County Assembly.
- Transferred Function Entities: Any government entity executing a transferred function must submit quarterly implementation updates to the Senate and the respective legislative assembly.
- Auditor-General Performance Audits: The Auditor-General must audit both financial and non-financial operations of transferred functions, submitting a special report within three months after the close of the financial year.
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