(6) The recommendations of the Cabinet Secretary in subsection (5) (f) shall be included in the report and tabled in the National Assembly. Passing of the Finance Bill. 41. Not later than ninety days after passing the Appropriation Bill, the National Assembly shall consider and approve the Finance Bill with or without amendments. Consideration by Parliament of Division of Revenue and County Allocation of Revenue Bills. 42. Parliament shall consider the Division of Revenue and County Allocation of Revenue Bills not later than thirty days after the Bills have been introduced with a view to approving them, with or without amendments. Limited powers of accounting officer of national government entity to reallocate appropriate funds.

43. (1) An accounting officer may reallocate funds from the authorised use but may not reallocate funds where- (a) the funds are appropriated for transfer to another government entity or person; (b) the funds are appropriated for capital expenditure except to defray other capital expenditure; (c) the reallocation of funds is from wages to non- wages expenditure; or (d) the transfer of funds may result in contravention of fiscal responsibility principles. (2) An accounting officer for a national government entity, other than a state corporation, may reallocate funds between programs, or between Sub-Votes, in the budget for a financial year if— (a) there are provisions in the budget of a program or Sub-Vote which are unlikely to be utilised; (b) a request for the reallocation has been made to the National Treasury explaining the reasons for the reallocation and the National Treasury has approved the request; and (c) the total sum 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 financial year.

(3) Regulations made under this Act may provide for the reallocation of funds within Sub-votes or programs. The Public Finance Management Act, 2012 67 National government to submit supplementary budget to Parliament. 44. (1) The national government shall submit to Parliament for approval, a supplementary budget in support of money spent under Article 223 of the Constitution. (2) After Parliament has approved spending under subsection (1), an Appropriation Bill shall be introduced for the appropriation of the money spent. (3) The supplementary budget shall include a statement showing how the additional expenditure relates to the fiscal responsibility principles and financial objectives. Appropriations to lapse if unspent at the end of the financial year.

45. (1) An appropriation that has not been spent at the end of the financial year for which it was appropriated shall lapse immediately at the end of that financial year. (2) Subject to any other legislation, where, at the end of a financial year, a national government entity is holding appropriated money that was withdrawn from the National Exchequer Account but has not been spent, it shall repay the unspent money into the National Exchequer Account and shall prepare and submit a statement of the same to the Controller of Budget. Responsibilities of the Cabinet Secretary and functions of the national government with respect to grants and loans Overall responsibility of Cabinet Secretary.

46. (1) The Cabinet Secretary shall, in addition to his or her other functions under the Constitution, this Act and any other legislation— (a) oversee the formulation of macro-economic and financial policies of the Government; (b) by agreement, assist national government entities and county governments in building capacity for efficient, effective and transparent financial management; (c) where applicable, support the efforts of national government entities and county governments to avert or resolve their financial problems. (2) Within twenty-one days after the end of each month, the Cabinet Secretary shall publish in the Gazette a statement of actual revenues collected by category and net exchequer issues by the National Treasury.

(3) In the performance of the duties and functions under The Public Finance Management Act, 2012 68 this Act the Cabinet Secretary shall — (a) seek views from county governments on the proposed macro-economic and financial policies using the Intergovernmental Budget and Economic Council established under this Act; (b) share with national government entities and county governments any findings that may assist national government entities and county governments in improving their financial management; and (c) upon detecting any emerging or impending financial problems in a national government entity or county government, immediately alert the national government entity or county government of the problem. Conditions for receiving grants and donations by national government or its entities or third parties.

47. (1) In this section and section 48 — (a) “donation” means a gift or a contribution; (b) “grant” means financial or other assistance by a development partner which is not repayable and — (i) under which public money is paid to or used by a grant recipient; (ii) which is intended to finance or facilitate 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 national government; and (iii) under which the grant recipient is required to act in accordance with any terms or conditions specified in a grant agreement. (c) “grant recipient” means the national government or a national 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 Kenya The Public Finance Management Act, 2012 69 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.

(2) Subsections (3) to (10) apply to the national government and a national government entity. (3) The national government or a national government entity may receive a grant or donation from a development partner with the approval of the Cabinet Secretary and only as provided by this section. (4) Funds received in the form of grants or donations shall only be spent in accordance with Articles 221 and 223 of the Constitution and this section. (5) As soon as possible after receiving the grant or donation, the recipient shall notify the Cabinet Secretary of the receipt.

(6) If a project that is being financed by a grant or donation requires national government funding, the project may only be started when— (a) the required funding has been appropriated in accordance with this Act or is authorised by other legislation; or (b) the Cabinet Secretary has given a written authorisation for the project to start. (7) The Cabinet Secretary shall inform Parliament of the authorisation given under subsection (6)(b) in accordance with Article 223 of the Constitution. (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 shall administer and account for the grant or donation by using – (a) government financial accounting and auditing The Public Finance Management Act, 2012 70 laws and, administrative procedures; or (b) any financial accounting rules and procedures for money specified in the agreement between the recipient and the development partner. (10) The Cabinet Secretary may in addition to the audit under subsection (9), permit a donor of a grant to audit such funds on the basis of its own financial accounting rules. Regulations on grant administration. 48. (1) Regulations approved by Parliament shall provide for the administration, control and management of grants, including— (a) procedures to ensure that grants are spent on the basis of the integrated national development plan; (b) procedures for the allocation and disbursement of the grants; (c) requiring that grants be used only to finance programmes within the integrated development plan; (d) the publication of transparent criteria for the allocation of grants; (e) requiring specific terms and conditions in agreements to which grant recipients are subjected; (f) procedures for the budgeting, financial management, accounting and reporting of grants by grants recipients; (g) procedures under which a third party may be authorised to receive, control or pay public money as a grant; and (h) measures to ensure that a third party authorised to receive, control or pay public money as a grant, or responsible for any other aspect of administration of a grant, is subject to the same obligations as a public officer under this Act.