16. (1) The national government may, with the approval of Parliament, deviate from the financial objectives in a Budget Policy Statement on a temporary basis where such deviation is necessitated by a major natural disaster or other significant unforeseen event. (2) If there is a change of national government, the new government may, with the approval of Parliament, deviate from the financial objectives in a Budget Policy Statement but shall not deviate from the fiscal responsibility principles. (3) The National Treasury shall provide a report to Parliament regarding the deviation, and shall include in the report— (a) the reasons for and the implications of the deviation; (b) proposals to address the deviation; (c) the period the deviation is estimated to last; and (d) the status of development projects initiated by the national government and if any project has been stopped, the reasons for doing so.

(4) The National Treasury shall publish and publicise the report made under subsection (3) within fifteen days after its submission to Parliament. Responsibilities of the National Treasury with respect to national public funds The National Treasury to administer the Consolidated Fund 17. (1) The National Treasury shall administer the Consolidated Fund in accordance with Article 206 of the Constitution. (2) The National Treasury shall maintain the Consolidated Fund in an account to be known as the National Exchequer Account, kept at the Central Bank of Kenya and shall, subject The Public Finance Management Act, 2012 46 to Article 206(1) of the Constitution— (a) facilitate payment into that account all money raised or received by or on behalf of the national government; and (b) pay from that National Exchequer Account without undue delay all amounts that are payable for public services.

(3) The National Treasury shall ensure that the National Exchequer Account is not overdrawn at any time. (4) Where a withdrawal from the Consolidated Fund is authorised under the Constitution or an Act of Parliament for the appropriation of money, the National Treasury shall make a requisition for the withdrawal and submit it to the Controller of Budget for approval. (5) The approval of a withdrawal from the Consolidated Fund by the Controller of Budget, together with written instructions from the National Treasury requesting for the withdrawal, shall be sufficient authority for the Central Bank of Kenya to pay amounts from the National Exchequer Account in accordance with the approval and instructions provided.

(6) The National Treasury shall, at the beginning of every quarter, and in any event not later than the fifteenth day from the commencement of the quarter, disburse monies to county governments. (7) The disbursement referred to in subsection (6) shall be done in accordance with a schedule prepared by the National Treasury in consultation with the Intergovernmental Budget and Economic Council, with the approval of the Senate, and published in the Gazette, as approved, not later than the 30th May in every year. The National Treasury to administer the Equalisation Fund.

18. (1) The National Treasury shall administer the Equalisation Fund in accordance with Article 204 of the Constitution. (2) The National Treasury shall keep the Equalisation Fund in a separate account maintained at the Central Bank of Kenya and shall— (a) transfer into that Equalisation Fund all revenues payable into the Fund under Article 204(1) of the Constitution; and (b) transfer from that Equalisation Fund, without undue The Public Finance Management Act, 2012 47 delay, all money for purposes specified in Article 204(2) of the Constitution. (3) The National Treasury shall ensure that the Equalisation Fund Account is not overdrawn at any time.

(4) Where a withdrawal from the Equalisation Fund is authorised under an Act of Parliament that approves the appropriation of money, the National Treasury shall make a requisition for the withdrawal and submit it to the Controller of Budget for approval. (5) The approval by the Controller of Budget of a withdrawal from the Equalisation Fund, together with written instructions from the National Treasury requesting for the withdrawal, shall be sufficient authority for the Central Bank of Kenya to pay amounts from the Equalisation Fund Account in accordance with the approval and instructions given.

(6) Any unutilised balances in the Equalisation Fund shall not lapse at the end of the financial year, but shall be retained for use for the purposes for which the Equalisation Fund was established. Source of the Contingencies Fund. 19. The Contingencies Fund shall consist of monies appropriated from the Consolidated Fund by an appropriation Act in any financial year. Cabinet Secretary to administer the Contingencies Fund. 20. (1) The Cabinet Secretary shall administer the Contingencies Fund. (2) The permanent capital of the Contingencies Fund shall not exceed ten billion shillings or such other amount as may be prescribed by the Cabinet Secretary with the approval of Parliament.

(3) The Cabinet Secretary shall keep the Contingencies Fund in a separate account, maintained at the Central Bank of Kenya and shall pay — (a) into that account all monies appropriated to the Contingencies Fund by an appropriation Act; and (b) from the Contingencies Fund, without undue delay, all advances made under section 21. Advances from the Contingencies Fund 21. (1) Subject to section 22, the Cabinet Secretary may make advances from the Contingencies Fund if, on the basis of the set criteria and the process and operational guidelines of Article 208 (1) as prescribed in regulations approved by The Public Finance Management Act, 2012 48 Parliament and the laws relating to disaster management, the Cabinet Secretary is satisfied that an urgent and unforeseen need for expenditure has arisen for which there is no specific legislative authority.

(2) For the purposes of subsection (1), there is an urgent need for expenditure if the Cabinet Secretary, guided by regulations and relevant laws, establishes that— (a) the payment which was not budgeted for because it was unforeseen and cannot be delayed until a later financial year without harming the general public interest; and (b) the event was unforeseen. (3) In addition to regulations and relevant laws, and for the purposes of this section, an unforeseen event is one which— (a) threatens serious damage to human life or welfare; (b) threatens serious damage to the environment; and (c) is meant to alleviate the damage, loss, hardship or suffering caused directly by the event.

(4) An event threatens damage to human life or welfare under subsection (3)(a) only if it involves, causes or may cause – (a) loss of life, human illness or injury; (b) homelessness or damage to property; (c) disruption of food, water or shelter; or (d) disruption to services, including health services. (5) Subject to subsection (2), the Cabinet Secretary shall, by regulations and with Parliament approval, prescribe the criteria for making advance under subsection (1). Cabinet Secretary to seek Parliamentary approval for payments made from Contingencies Fund.