140. (1) A County Executive Committee member for finance may, on behalf of the county government, raise a loan for that Government’s purposes, only if the loan and the terms and conditions for the loan are set out in writing and are in accordance with— (a) Article 212 of the Constitution; (b) sections 58 and 142 of this Act; (c) the fiscal responsibility principles and the financial objectives of the county government set out in its most recent County Fiscal Strategy Paper; and (d) the debt management strategy of the county government over the medium term.

(2) A loan may be raised either within Kenya or outside Kenya. Obligations and restrictions with respect to county 141. (1) In borrowing money, a county government shall ensure that its financing needs and payment obligations are The Public Finance Management Act, 2012 140 government borrowing. met at the lowest possible cost in the market that is consistent with a prudent degree of risk, while ensuring that the overall level of public debt is sustainable. (2) A county government may borrow money only in accordance with this Act or any other legislation and shall not exceed the limit set by the county assembly.

(3) A county government may borrow money in accordance with section 58, and only for purposes that are prescribed by regulations made under this subsection. (4) A public debt incurred by a county government is a charge on the County Revenue Fund, unless the County Executive Committee member for finance determines that all or part of the public debt that would otherwise be a charge on that Fund shall be a charge on another public fund established by that county government or any of its entities.

(5) The County Executive Committee member for finance shall pay the proceeds of any loan raised under this Act into the County Revenue Fund or into any other public fund established by the county government or as the County Executive Committee member for finance may determine. (6) A County Executive Committee member for finance may establish such sinking fund or funds for the redemption of loans raised under this Act for the purposes of the county government or any of its entities as the County Executive Committee member for finance considers necessary.

(7) A County Executive Committee member for finance may in accordance with national legislation on public procurement and disposal of assets— (a) appoint advisers, agents and underwriters for the purposes of raising loans; and (b) enter into agreements with those advisers, agents and underwriters as to the role to be undertaken by them and the remuneration to be paid to them. The Public Finance Management Act, 2012 141 (8) Any expenses incurred in connection with borrowing by a county government shall be a charge— (a) on the County Revenue Fund; or (b) on such other county public fund established by the county government or any of its entities as the County Executive Committee member for finance may determine in accordance with regulations approved by the county assembly.

(9) The costs, interests and principal payments made by the national government on behalf of the county concerning loans to the county government shall, together with the principal amount, be reimbursed to the national government by the county government. Borrowing by county government entities. 142. (1) The County Assembly may authorise short term borrowing by county government entities for cash management purposes only. (2) Any borrowing under subsection (1) may not exceed five percent of the most recent audited revenues of the entity. (3) A county government entity that has any such borrowing shall ensure that the money borrowed is repaid within a year from the date on which it was borrowed. Persons who are authorised to execute loan documents at county government level.

143. (1) The County Executive Committee member for finance or any person designated by the County Executive Committee member for finance in writing is authorised to execute loan documents for borrowing by the county government. (2) Despite the provisions of subsection (1), the following persons are authorised to execute loan documents for borrowing by a county government entity- (a) the accounting officer responsible for the entity; and (b) any other specified office holder authorised by legislation to execute such documents on behalf of an The Public Finance Management Act, 2012 142 entity. County government may issue securities only if authorised by this Act.

144. (1) The county government may issue securities, whether for money that it has borrowed or for any other purpose, only in one or more series and only in accordance with this Act and regulations. (2) The County Executive Committee member for finance may issue securities on behalf of the county government, for money borrowed by the county government in accordance with the criteria prescribed by regulations made for the purpose of this subsection. (3) Subject to the provisions of section 141 of this Act, the authority of the County Executive Committee member for finance to borrow money includes the authority to borrow money by issuing county government securities in accordance with the regulations.

(4) Any county government securities issued by the County Executive Member for finance under this section shall be within the borrowing limits set out by the county assembly under subsection 141(2) of this Act. (5) A county government securities— (a) may be issued in one or more series; and (b) may be issued in accordance with loan agreements entered into in accordance with regulations developed by the County Executive Committee member for finance and approved by the County Assembly. (6) An agreement to obtain a loan by a county government entity made under subsection (5), may be amended from time to time and where the amendment results in further indebtedness or prejudice to the entity that borrowed, the amendment shall be approved by the county assembly.

(7) The County Executive Committee member for finance shall ensure that every county government security issued under this section is given in the name of that County. (8) A county government security may be executed on behalf of the county government only by— (a) the County Executive Committee member for finance; (b) a delegate appointed by the County Executive Committee member for finance; or (c) a borrowing agent appointed for that purpose under The Public Finance Management Act, 2012 143 this Act. (9) For the purposes of subsection (8), it shall be sufficient if the signature of a person who is required to execute a county government security under this section is reproduced on the security.