(2) An accounting officer for a county government entity may reallocate funds between programs, or between Sub-Votes, in the budget for a financial year, but only if— (a) provisions made in the budget of a program or Sub-Vote are available and are unlikely to be used; (b) a request for the reallocation has been made to the County Treasury explaining the reasons for the reallocation and the County Treasury has approved the request; and (c) the total of all reallocations made to or from a program or Sub-Vote does not exceed ten percent of the total expenditure approved for that program or Sub-Vote for that year.

(3) Regulations approved by the county assembly may prescribe requirements for the reallocation of funds within Sub-votes or programs.

155. County government entity to maintain internal auditing arrangements (1) A county government entity shall ensure that it complies with this Act and— (a) has appropriate arrangements for conducting internal audit according to the guidelines issued by the Accounting Standards Board; and (b) if any regulations are in force under subsection (2), those regulations are complied with.

(2) Regulations may prescribe requirements to be complied with in conducting any audits. (3) The arrangements for the conduct of internal auditing for a county government entity include— (a) reviewing the governance mechanisms of the entity and mechanisms for transparency and accountability with regard to the finances and assets of the entity; (b) conducting risk-based, value-for-money and systems audits aimed at strengthening internal control mechanisms that could have an impact on achievement of the strategic objectives of the entity; (c) verifying the existence of assets administered by the entity and ensuring that there are proper safeguards for their protection; 98 [Rev. 2020] Public Finance Management No. 18 of 2012 (d) providing assurance that appropriate institutional policies and procedures and good business practices are followed by the entity; and (e) evaluating the adequacy and reliability of information available to management for making decisions with regard to the entity and its operations.

(4) A county government entity shall ensure that the arrangements for conducting internal audits in respect of the entity are in accordance with international best practices for internal auditing.

(5) A county government entity shall establish an internal auditing committee whose composition and functions are to be prescribed by the regulations.

156. Disciplinary measures against public and accounting officers (1) If an accounting officer reasonably believes that a public officer employed by a county government entity has engaged in improper conduct in relation to the resources of the entity, the accounting officer shall— (a) take appropriate measures to discipline the public officer in accordance with regulations; or (b) refer the matter to be dealt in terms of the statutory and other conditions of employment applicable to that public officer.

(2) If the County Executive Committee Member for finance reasonably believes that an accounting officer has engaged in improper conduct within the meaning of subsection (4), the County Executive Committed member for finance shall— (a) take appropriate measures to address the matter in accordance with laid down procedures; or (b) refer the matter to be dealt with in terms of the statutory and other conditions of employment applicable to that public officer.

(3) The measures referred to in subsection (2)(a) include the County Executive Committee member for finance revoking the designation as accounting officer.

(4) For the purposes of this section, a public officer or accounting officer engages in improper conduct if the officer— (a) contravenes or fails to comply with this Act or any regulation in force; (b) undermines any financial management procedures or controls; (c) makes or permits an expenditure that is unlawful or has not been properly authorised by the entity concerned; or (d) fails without reasonable cause to pay eligible and approved bills promptly in circumstances where funds are provided for.