The County Governments Additional Allocations Bill, 2024

Background

Pursuant to Article 202(2) of the Constitution of Kenya, county governments may be given additional allocations from the national government's share of revenue, either conditionally or unconditionally. The County Governments Additional Allocations Bill, 2024 provides the legislative framework for distributing these additional funds for the 2024/2025 Financial Year. It ensures that funds sourced from national revenue, specialized funds (like the Road Maintenance Fuel Levy), and international development partners are effectively channeled to the 47 counties.

Key Amendments

While primarily an annual allocation bill rather than an amending Act, this bill operationalizes allocations linked to other statutes:

• Mining Act (Cap. 306): Facilitates the transfer of the 20% share of mineral royalties to eligible county governments under section 183(5)(b).
• Public Finance Management Act (No. 18 of 2012): Requires transfers to be executed in accordance with a payment schedule published by the Cabinet Secretary in the Kenya Gazette pursuant to section 17 of the Act.

New Obligations

The Bill introduces specific management, reporting, and execution responsibilities for both national and county government officials:

• Agreement Requirements: The National Treasury must table any agreement between a county government and a development partner in the National Assembly and the Senate before the allocation can be included in the Budget Policy Statement.
• National Treasury Reporting: The Cabinet Secretary responsible for finance must publish a monthly report on actual transfers of all additional allocations in the Kenya Gazette by the 15th day of every subsequent month.
• County Treasury Reporting: Each county treasury must reflect all transfers in its books of accounts. They are required to submit consolidated quarterly and annual reports to the National Treasury and the Public Sector Accounting Standards Board detailing:
  • Actual transfers received.
  • Actual expenditures of allocations under section 5(1), (2), and (3).
  • The level of compliance with conditions set out in intergovernmental agreements.
  • Detailed explanations of any material problems encountered in executing the expenditures.
• Performance Assessments: For climate resilience grants (FLLoCA), accounting officers must conduct performance assessments of county governments to determine eligibility based on specific criteria (e.g., population, land area, poverty index, and basic allocations).

Transitional Provisions

• Inclusion in County Budgets: All additional funds allocated under this Act must be formally integrated into the respective county governments' appropriation bills for the 2024/2025 Financial Year.
• Written Agreements: Allocations funded by loans or grants from development partners will not be included in the national budget estimates unless the Cabinet Secretary and the respective development partner have a signed, written agreement confirming the transfer of funds.