REVIEW OF THE PUBLIC FINANCE MANAGEMENT ACT, 2021

Introduction

The principal purpose and objective of the Public Finance Management Act, 2012 is to ensure that public finances are managed at both the national and the county levels of government in accordance with the principles set out in the Constitution which in turn facilitate effective and efficient use of limited resources; to ensure the public officers who are given responsibility for managing the finances are accountable to the public for the management of those finances through Parliament and County Assemblies.

In this article, we highlight some of the notable amendments that have been brought forth by the County Allocation of Revenue Act, 2021 (Act No. 9 of 2021) that came into force on 29th of June 2021.  

The Amendment  

The County Allocation of Revenue Act, 2021 under section 11 has amended section 130 of the Public Finance Management Act by inserting the following new subsections immediately after subsection (2)

3. In preparing the annual appropriation Bill under subsection (2), the county executive committee member responsible for finance shall include, in the allocation to the county assembly any unspent funds that had been appropriated to the county assembly in the immediate preceding financial year.

4. Where an Appropriation Bill is passed before the beginning of the financial year to which it relates and does not contain unspent funds allocated to the county assembly in the immediate preceding financial year, the county executive committee member for finance shall prepare and submit to the county assembly a Supplementary Appropriation Bill allocating the unspent funds.

5. A Bill prepared under subsection (4) shall be introduced in the county assembly within two months of the commencement of the financial year.

6. Failure by the county executive committee member for finance to prepare a Supplementary Appropriation Bill under subsection (4) shall constitute an additional indicator of a serious or persistent material breach under section 94.

Conclusion

In conclusion, we note that these amendments will help achieve the objectives of the Act as public officers who are given responsibility for managing the finances will now be accountable to the public for the management of those finances through County Assemblies. Nevertheless, the amendments are good progress, noting that the journey of a thousand miles begins with a single step.

For any inquiries relating to the Public Finance Management Act, 2012, contact us on info@mmsadvocates.co.ke or kachero@mmsadvocsates.co.ke

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