(2) The report referred to in subsection (1) shall provide an independent opinion on findings on details of the material breach or persistent material breaches in such a manner as to allow Parliament to make a decision within thirty days on whether or not to approve the renewal of the decision to stop the transfer of funds. (3) An intervention based on Article 225(3) of the The Public Finance Management Act, 2012 105 Constitution and provisions of this Act shall end when— (a) the serious or persistent material breach in the State organ’s or public entity’s financial affairs has been resolved; (b) the State organ’s or public entity’s ability to meet its obligations to provide basic services or its financial commitments is secured; or (c) Parliament has declined to renew the Cabinet Secretary’s decision to stop transfer of funds.

(4) Where Parliament has not renewed a decision in terms of Article 225 (6) of the Constitution to stop the transfer of funds, all funds held during the period of the stoppage shall be released within a period not exceeding fifteen days. Provision for a recovery plan. 99. (1) If as a result of an assessment using criteria provided for under this Act, the Cabinet Secretary determines that there is a serious or persistent material breach or that a county government is unable to perform its functions, the Cabinet Secretary shall— (a) notify the county government and the Cabinet Secretary responsible for matters relating to intergovernmental relations, of the finding and the intention to intervene; (b) consult the county governor to obtain the county government’s co-operation in the development and implementation of a recovery plan, including the approval of a budget and legislative measures giving effect to the recovery plan; (c) in consultation with the county government, prepare an appropriate recovery plan for the county government; and (d) notify the Controller of Budget, Senate, the Joint Intergovernmental Technical Committee and the Auditor -General of the findings and the content of the recovery plan.

(2) The approved recovery plan by the Joint Committee shall form the basis for releasing funds withheld during the period of stoppage and the release of subsequent transfers to The Public Finance Management Act, 2012 106 a state organ or public entity. (3) The purpose of the recovery plan referred to in subsection (1) shall be to secure the county government’s ability to meet its obligations to provide basic services or its financial commitments. (4) The recovery plan under this section shall— (a) identify the financial problems; (b) be designed to place the county government in a sound and sustainable financial condition as quickly as possible; (c) state the principal objectives of the plan and ways and means for achieving those objectives; (d) provide budget parameters which bind the county government for a specified period or until stated conditions have been met; (e) identify specific revenue raising measures that are necessary for financial recovery, including the rates at which tariffs should be set to achieve financial recovery; (f) set out a specific strategy for addressing the entity’s problems, including a strategy for reducing wasteful expenditure and increasing the collection of revenue, as may be necessary; (g) identify the human resources and the source of those resources; (h) describe the anticipated time frame for the recovery, and the milestones to be achieved; and (i) identify what actions are necessary for the implementation of the plan, distinguishing between actions to be taken by the entity and actions to be taken by other parties.

(5) In addition to provisions under subsection (4), the recovery plan may— (a) provide for the liquidation of specific assets, excluding those needed for the provision of the The Public Finance Management Act, 2012 107 minimum level of basic services; (b) provide for special measures to prevent unauthorised, irregular and wasteful expenditure and other losses; and (c) identify any actual and potential sources of revenue. (6) The intervention shall adhere to the values and principles of the Constitution and provisions of any other relevant law. Establishment of the Joint Intergovernmental Technical Committee. 100.(1) There is established a committee to be known as the Joint Intergovernmental Technical Committee (hereinafter referred to as “Joint Committee”) and shall comprise of — (a) the Cabinet Secretary; (b) the Cabinet Secretary responsible for matters relating to intergovernmental relations; (c) a representative of the county government or county government entity concerned; (d) a representative of the Intergovernmental Budget and Economic Council; and (e) a representative of the Commission on Revenue Allocation.

(2) The Joint Committee may invite or enlist any other persons to assist it in performing its functions under this section. (3) The Joint Committee shall meet at least once every three months to review any action of intervention referred to in this Part, and establish— (a) the progress on resolving the county government’s financial problems and the The Public Finance Management Act, 2012 108 recovery plan; and (b) the effectiveness of the recovery plan. (4) The Joint Committee shall, every four months, submit progress reports and, where appropriate, a final report on the intervention to the Cabinet Secretary, the County Executive Committee member for finance, the relevant county Assembly, the Intergovernmental Budget and Economic Council and the Senate. Termination of intervention. 101.(1) An intervention based on Article 190(3)(b) of the Constitution shall end— (a) if it is terminated in terms of Article 190(5) of the Constitution where there has been a breach of the procedure prescribed in the regulations approved by the Senate; or (b) where the Joint Committee is satisfied that the county government is able and willing to fulfil its obligation in terms of legislation or the Constitution that gave rise to the intervention; and (c) when the Joint Committee determines that the financial problem which caused the failure by the county government to comply with its obligation is resolved; and (d) when the Joint Committee finds that the county government is operating a financial management system that complies with legislation.

(2) At the end of an intervention, the Joint Committee shall notify— (a) Parliament; (b) the relevant County Assembly; and (c) the Controller of Budget. (3) The Joint Committee shall publish and publicise the end of the intervention. PART IV—COUNTY GOVERNMENT RESPONSIBILITIES WITH RESPECT TO MANAGEMENT AND CONTROL OF PUBLIC The Public Finance Management Act, 2012 109 FINANCE County government responsibilities in public finance. 102. (1) Each county government shall ensure adherence to— (a) the principles of public finance set out in Chapter Twelve of the Constitution; (b) the fiscal responsibility principles provided in

section 107 under this Act; (c) national values set out in the Constitution; and (d) any other requirements of this Act. (2) The County Executive Committee shall observe principles of collective responsibility in exercising their functions under this Act. (3) In making decisions a county assembly shall take cognisance of Article 216 (2) of the Constitution. Establishment of county treasuries. 103. (1) There is established for each county government, an entity to be known as County Treasury. (2) The County Treasury shall comprise — (a) the County Executive Committee member for finance; (b) the Chief Officer; and (c) the department or departments of the County Treasury responsible for financial and fiscal matters. (3)The County Executive Committee member for finance shall be the head of the County Treasury. Responsibilities and Powers of a County Treasury General responsibilities of a County Treasury.

104. (1) Subject to the Constitution, a County Treasury shall monitor, evaluate and oversee the management of public finances and economic affairs of the county The Public Finance Management Act, 2012 110 government including— (a) developing and implementing financial and economic policies in the county; (b) preparing the annual budget for the county and co- ordinating the preparation of estimates of revenue and expenditure of the county government; (c) co-ordinating the implementation of the budget of the county government; (d) mobilising resources for funding the budgetary requirements of the county government and putting in place mechanisms to raise revenue and resources; (e) managing the county government’s public debt and other obligations and developing a framework of debt control for the county; (f) consolidating the annual appropriation accounts and other financial statements of the county government in a format determined by the Accounting Standards Board; (g) acting as custodian of the inventory of the county government’s assets except where provided otherwise by other legislation or the Constitution; (h) ensuring compliance with accounting standards prescribed and published by the Accounting Standards Board from time to time; (i) ensuring proper management and control of, and accounting for the finances of the county government and its entities in order to promote efficient and effective use of the county’s budgetary resources; (j) maintaining proper accounts and other records in respect of the County Revenue Fund, the County Emergencies Fund and other public funds administered by the county government; (k) monitoring the county government’s entities to ensure compliance with this Act and effective management of their funds, efficiency and transparency and, in particular, proper accountability for the expenditure of those funds; (l) assisting county government entities in developing their capacity for efficient, effective and transparent financial management, upon request; The Public Finance Management Act, 2012 111 (m) providing the National Treasury with information which it may require to carry out its responsibilities under the Constitution and this Act; (n) issuing circulars with respect to financial matters relating to county government entities; (o) advising the county government entities, the County Executive Committee and the county assembly on financial matters; (q) strengthening financial and fiscal relations between the national government and county governments in performing their functions; (r) reporting regularly to the county assembly on the implementation of the annual county budget; and (s) taking any other action to further the implementation of this Act in relation to the county. Powers of a County Treasury.

105. (1) A County Treasury has such powers as are necessary to enable it to carry out its functions and responsibilities under this Act including- (a) with prior notice, access any system of public financial management used by any of the county government entities and the internal controls used to monitor the system; (b) taking appropriate measures, including the stoppage of funds, to deal with any failure of a county government entity to comply with this Act; (c) with prior notice, accessing the premises of a county government entity and inspecting all records and other documents relating to the financial affairs of that county government entity, kept by that entity; (d) requiring county government entities to comply with all applicable norms or standards regarding accounting practices, budget classification systems and other public financial management systems as prescribed by the Accounting Standards Board; (e) requiring any public officer employed by a county government or county government entity to provide explanations, information and assistance in respect to matters relating to the county government’s public finances: The Public Finance Management Act, 2012 112 Provided that a person providing the information shall not be liable if at the time of providing the information, that person, in writing, objected to providing such information on grounds that the information may incriminate him or her; (f) issuing guidelines to accounting officers for the county government entities, or public officers employed by those entities, with respect to the financial affairs of that Government or those entities, and monitoring compliance with those guidelines; and (g) ensuring that county government entities operate a financial management system that complies with national standards as prescribed by the Accounting Standards Board.

(2) A County Treasury may, in writing, authorise any of its officers to carry out a specified responsibility, or exercise a specified power, on its behalf. (3) When carrying out a responsibility, or exercising a power, on behalf of a County Treasury, an authorised officer shall, if requested to do so by the person in relation to whom the responsibility or power is being carried out or exercised, produce the officer’s authorisation for inspection and failure to comply with such a request invalidates any subsequent action purporting to be taken under the authority of the authorisation.