Article 208 of the Kenyan Constitution establishes the Contingencies Fund. The purpose of the Contingencies fund is the urgent and unforeseen need for expenditure for which there is no other legislative authority.
Further, the Public Finance Management Act contains more provisions on the Contingencies Fund.
The Cabinet Secretary responsible for matters relating to finance should administer the Contingencies Fund. The Cabinet Secretary should keep the Contingencies Fund in a separate account, maintained at the Central Bank of Kenya.
The permanent capital of the Contingencies Fund should not exceed ten billion shillings or such other amount as the Cabinet Secretary may prescribe with the approval of Parliament.
The Purpose of the Contingencies Fund
The Cabinet Secretary should only make advances from the Contingencies Fund if he or she is satisfied that an urgent and unforeseen need for expenditure has arisen for which there is no specific legislative authority.
The Cabinet Secretary may only make advances from the Contingencies Fund on the basis of the set criteria and the process and operational guidelines of Article 208 (1) as prescribed in regulations as approved by Parliament and the laws relating to disaster management.
There is an urgent need for expenditure if the Cabinet Secretary, guided by regulations and relevant laws, establishes that—
- the payment was not budgeted for because it was unforeseen and cannot be delayed until a later financial year without harming the general public interest; and
- the event was unforeseen.
Moreover, an unforeseen event is one which—
- threatens serious damage to human life or welfare;
- threatens serious damage to the environment; and
- is meant to alleviate the damage, loss, hardship or suffering caused directly by the event.
An event threatens damage to human life or welfare as mentioned above only if it involves, causes or may cause –
- loss of life, human illness or injury;
- homelessness or damage to property;
- disruption of food, water or shelter; or
- disruption to services, including health services.
For more about the Contingencies Fund in Kenya, see sections 19-23 of the Public Finance Management Act.