County Finances
Budgetary Allocations to Counties
Article 202 (1) of the Constitution provides that revenue raised nationally shall be shared equitably among national and county governments. This money is sent to counties using the CRA formula.
Article 202 (2) states that counties may be given additional allocations from the national government’s share of revenue, either conditionally or unconditionally.
Division of Revenue Act No. 1 of 2018
The sharing of funds FY 2018/19 between The National Government and County Governments is detailed in the Division of Revenue act No. 1 of 2018; Division of Revenue Act 2018
County Allocation of Revenue Act 2018
Following the sharing between The National and County Government Revenue as captured in the division of revenue act no. 1 of 2018, the total county allocation is subsequently shared amongst the county government s as detailed in the county allocation of revenue act 2018 in the Kenya Gazette Supplement No. 97 (act No. 8) as below; County Allocation of Revenue Act 2018
The National Treasury Payment Summary to County Governments for the last 5yrs
The National Treasury Payments to the County Governments for the last five (5) years, FY 2013/14 – 2017/18, is summarized as follows; National Treasury Payments to the County Governments for the last five (5) years
Equalization Fund
According to the Kenya constitution article 204 establishes the Equalization fund which shall be paid one half per cent of all the revenue collected by the national government each year calculated on the basis of the most recent audited accounts of revenue received, as approved by the National Assembly. The national government shall use the Equalisation Fund only to provide basic services including water, roads, health facilities and electricity to marginalised areas to the extent necessary to bring the quality of those services in those areas to the level generally enjoyed by the rest of the nation, so far as possible.
Audit Reports
County audit reports are produced by the Auditor General in line with Article 229 of the Constitution of Kenya; Sections 96, 114, 115, 116, 149 and 163, of the Public Finance Management Act, 2012; and Sections 47-54 of the Public Audit Act, 2015.
Article 229 (4) states that within six months after the end of each financial year, the Auditor-General shall audit and report, in respect of that financial year, on—
(a) the accounts of the national and county governments;
(b) the accounts of all funds and authorities of the national and county governments;
(c) the accounts of all courts;
(d) the accounts of every commission and independent office established by the Constitution;
(e) the accounts of the National Assembly, the Senate and the county assemblies;
(f) the accounts of political parties funded from public funds;
(g) the public debt; and
(h) the accounts of any other entity that legislation requires the Auditor General to audit.
Under Article 229(5), the Auditor-General may audit and report on the accounts of any entity that is funded from public funds. Article 229(6) provides that an audit report shall confirm whether or not public money has been applied lawfully and in an effective way. According to Article 229 (7) Audit reports shall be submitted to Parliament or the relevant county assembly. Article 229(8) requires Parliament or the county assembly to debate and consider the report and take appropriate action within three months after receiving an audit report.
Section 149. (1) of the Public Finance Management Act avers that an accounting officer is accountable to the county assembly for ensuring that the resources of the entity for which the officer is designated are used in a way that is—
(a) lawful and authorised; and
(b) effective, efficient, economical and transparent.
Section 149. (2) (k) clarifies that in carrying out a responsibility imposed by subsection (1), an accounting officer shall, in respect of the entity concerned prepare annual financial statements for that financial year and submit them to the Auditor-General for audit, with a copy to the County Treasury, not later than three months after the end of each financial year.
Section 47 of the Public Audit Act directs that financial statements required under the Constitution, the Public Finance Management Act, 2012 (No. 18 of 2012) and any other legislation, be submitted to the Auditor General within three months after the end of the fiscal year to which the accounts relate. Under Section 48 of the Public Audit Act, the Auditor-General shall audit and report, in respect of that financial year, on the accounts specified in Article 229 of the Constitution within six months after the end of each financial year.
Annual County Audit Reports
Since the advent of devolution, the Office of the Auditor General has produced the following annual audit reports for each of the 47 counties: