The County Public Finance Laws (Amendment) Bill, 2023
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Establishment of Dedicated County Assembly Funds
Inserts Section 109A into the Public Finance Management Act, 2012, establishing a dedicated County Assembly Fund for each county. The Fund will be kept in a specific account at the Central Bank of Kenya, administered by the Clerk of the County Assembly, and used to defray assembly administrative and asset maintenance expenses.
Mandatory Monthly Treasury Disbursements by 15th
Inserts Section 109E, which obligates the County Treasury to disburse operational funds to the County Assembly Fund monthly, and not later than the fifteenth day of the commencement of the month, according to a schedule approved alongside the County Appropriation Bill.
Controller of Budget Gets Bank Account Viewer Rights
Inserts a new Section 119A to give the Controller of Budget direct online viewer rights access to all bank accounts maintained by the county executive, the county assembly, and all other county government entities.
Retaining Unutilised Balances at Year-End
Amends the rules under Sections 109A(10) and 109C so that any receipts, savings, accruals, and balances in the County Assembly Fund do not lapse at the end of the financial year and are instead retained in the Fund.
Bill No.
Senate Bills No. 39
Gazette No.
Supplement No. 159
Sponsor
Kathuri Murungi
Background
The principle of separation of powers requires that county assemblies operate independently of county executives. However, county assemblies currently rely on the county executive's treasury to release funds after receiving approvals from the Controller of Budget. This reliance often results in delays and conflicts, compromising the financial autonomy of county assemblies. This Bill aims to secure financial independence for Kenya's forty-seven county assemblies by creating independent funding mechanisms.
Key Amendments
Amendments to the County Assembly Services Act, 2017 (No. 24 of 2017):
- Section 2: Deletes the definition of the word "fund".
- Sections 31(5) and 32(3): Deleted to align with the new financial provisions.
- Section 34: Deleted in its entirety to pave the way for the new central funding mechanisms under the Public Finance Management Act.
Amendments to the Public Finance Management Act, 2012 (No. 18 of 2012):
- Section 109A: Establishes a County Assembly Fund for each county, outlining its revenue sources (grants, county appropriations, donations, and investment fees) and assigning its administration to the Clerk of the County Assembly.
- Section 109B: Directs that the Fund shall be utilized to pay for the administrative expenses of the County Assembly and to acquire or maintain its physical assets.
- Section 109C: Mandates that all end-of-year balances, savings, and receipts are retained within the Fund and do not lapse back to the national or county executive exchequer.
- Section 109E: Mandates county treasuries to disburse monthly operational funds to the assembly accounts by the 15th of each month.
- Section 119A: Grants the Controller of Budget direct viewer rights to all bank accounts held by county executives, assemblies, and related county entities.
- Section 136: Replaces subsection (2) to dictate that any unspent money withdrawn from the County Exchequer or County Assembly Fund must be returned to the respective account at the end of the financial year, alongside a refund statement submitted to the Controller of Budget.
New Obligations
- Clerks of County Assemblies (Fund Administrators): Must ensure that all earnings and accruals are retained in the Fund, maintain the account at the Central Bank of Kenya, prevent the account from being overdrawn, secure written approval from the Controller of Budget before withdrawals, and submit financial reports to the Commission on Revenue Allocation (CRA) and the Controller of Budget.
- County Treasuries: Must prepare and submit a disbursement schedule alongside the County Appropriation Bill, and ensure monthly disbursements are executed on or before the 15th day of every month.
- County Government Entities: Must repay any unspent appropriated funds to the County Exchequer Account or County Assembly Fund Account at the close of each financial year, and prepare a detailed refund statement for the Controller of Budget.
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Updates will be visible here once they are approved and applied to this bill.