(1) In this section and section 139— (a) “donation” means a gift or a contribution; (b) “grant” means the provision of financial or other assistance by a development partner which is not repayable and— (i) where public money is paid to or used by a grant recipient; (ii) which is intended to finance the development of projects or delivery of services or otherwise assist the grant recipient to achieve goals that are consistent with the policy objectives of the county government; and (iii) where the grant recipient is required to act in accordance with any terms or conditions specified in a grant agreement; (c) “grant recipient” means the county government or a county government entity authorised to control or spend money under this Act or an incorporated or unincorporated body not otherwise authorised to control or spend money under this Act; (d) “intended beneficiaries” means the people of the county whom the projects or public services financed by a grant are intended to benefit; (e) “third party” means any other person other than a public officer. 88 [Rev. 2020] Public Finance Management No. 18 of 2012

(2) Subsections (3) to (9) apply to the county government and county government entities. (3) A county government or county government entity may receive a grant or donation from a development partner with the approval of the County Executive Committee member for finance and only as provided by this section.

(4) As soon as practicable after receiving the grant or donation, the recipient shall notify the County Executive Committee member for finance and the Cabinet Secretary of the receipt.

(5) Funds received in the form of grants or donations shall only be spent in accordance with Article 224 of the Constitution.

(6) If a project that is being financed by a grant or donation from a development partner requires county government funding, the project may only be started when — (a) the required funding has been appropriated in accordance with this Act or is otherwise authorised by legislation; or (b) the County Executive Committee member for finance has given a written authorisation for the project to begin.

(7) The County Executive Committee member for finance shall inform the county assembly of the authorisation given under subsection (6)(b).

(8) The recipient of a grant or donation from a development partner shall record the amount or value of the grant or donation in its books of accounts.

(9) Subject to audit in terms of Article 229(4) of the Constitution, the recipient of a grant or donation from a development partner shall administer and account for the grant or donation by using government— (a) financial and accounting practices laid down under an Act of Parliament, rules and regulations; and (b) administrative, accounting and auditing procedures, including financial accounting rules and procedures for accounting for the receipt or expenditure of money specified or referred to, in any agreement between the recipient and the development partner.

139. Regulations on grant administration (1) Regulations approved by the county assembly shall provide for the administration, control and management of grants, including— (a) procedures for the allocation and disbursement of grants, including requiring the publication of transparent criteria for the allocation of grants; (b) requirements for grant agreements binding on grant recipients that specify the terms and conditions to which the grant is subject; (c) procedures for the budgeting, financial management, accounting and reporting of grants by grants recipients; (d) procedures under which a third party may be authorised to receive, control or pay public money as a grant; and (e) measures to ensure that any third party that is authorised to receive, control or pay public money as a grant, or is responsible for any other aspect of administration of a grant, is subject to the same obligations as a public officer under this Act. 89 No. 18 of 2012 Public Finance Management [Rev. 2020]

(2) Regulations under subsection (1) shall include measures to ensure public disclosure, accountability and participation in relation to grants including— (a) timely public disclosure to intended beneficiaries of the allocation and disbursement of grants to grant recipients; (b) timely public disclosure by grant recipients to intended beneficiaries of expenditure and performance achieved in relation to the grant; (c) measures that allow the intended beneficiaries to participate in the design and management of the projects or public services financed by the grant; (d) measures that allow the intended beneficiaries to report instances of non-compliance with the regulations or grant agreement; (e) sanctions that may be imposed on grant recipients in response to instances of non-compliance by one or more grant recipients; and (f) the obligations of any public officer or third party authorized to receive, control or pay public money as grants.