The Equalisation Fund Appropriation Bill, 2023
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
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Executive
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Final
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KSh 10.86 Billion Issued from the Equalisation Fund
Authorizes the Equalisation Fund Advisory Board to issue KSh 10,867,400,000 out of the Fund for the financial year 2023/24. This fund is intended for the provision of basic services to bring marginalized areas to the development standards of the rest of the nation.
KSh 10.54 Billion Allocated Directly to Marginalised Counties
Allocates KSh 10,541,378,000 for direct transfer to designated beneficiary counties, constituencies, and wards. This money must be applied strictly to basic infrastructure needs, including:
- Water services
- Road networks
- Health facilities
- Electricity connections
Counties Must Open Special Purpose CBK Accounts
Establishes strict financial controls, including:
- A prohibition on paying transferred funds into the general County Revenue Fund (Section 5(1)).
- A requirement that each beneficiary county open a special purpose account at the Central Bank of Kenya to receive its annual allocation (Section 5(2)).
Strict Withdrawal and Oversight Controls Established
Under Section 6, funds can only be paid out of the Central Bank of Kenya Equalisation Fund Account upon joint authority consisting of:
- Written authorization from the Controller of Budget.
- Written instructions from the secretary of the Equalisation Fund Advisory Board submitted through the National Treasury.
Bill No.
Senate Bills No. 30
Gazette No.
Supplement No. 113
Sponsor
Ali Roba
Background
The Equalisation Fund is established under Article 204(1) of the Constitution of Kenya. Its primary purpose is to provide basic services—specifically water, roads, health facilities, and electricity—to marginalized areas to bring the quality of those services to the level generally enjoyed by the rest of the country.
The Equalisation Fund Appropriation Bill, 2023, provides the legislative authority and framework for the distribution and administration of these funds for the financial year ending 30th June, 2024.
Key Amendments
While the Bill does not amend existing Acts, it enacts the statutory spending limits for the Fund for the 2023/2024 financial year. It sets the specific allocation amounts and implements administrative guidelines to govern disbursements.
New Obligations
The Bill imposes several operational and administrative duties on the Equalisation Fund Advisory Board and beneficiary county governments:
- Board Administrative Spending Limit: The administrative expenses of the Equalisation Fund Advisory Board are strictly capped at KSh 326,022,000 for the financial year (Section 3(a)).
- Exclusion from County Revenue Fund: Beneficiary county governments are prohibited from merging these disbursements with their regular county revenues. Section 5(1) dictates that these funds shall not be paid into the County Revenue Fund.
- Special Central Bank Accounts: Beneficiary counties are obligated under Section 5(2) to open a special purpose account in the Central Bank of Kenya specifically for receiving their allocations of the Fund.
- Authorized Withdrawals: Withdrawals from the main Equalisation Fund Account require the joint authorization of the Controller of Budget and written instructions from the Secretary of the Board through the National Treasury (Section 6).
Transitional Provisions
Section 1 dictates that the Act shall be deemed to have come into force on 1st July, 2023, ensuring continuity of funding for the service year ending on 30th June, 2024.
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