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What is the Purpose of the Consolidated Fund in Kenya?

What is the Consolidated Fund in Kenya?

Article 206 of the Constitution establishes the Consolidated Fund in Kenya. This fund acts as the main bank account for the national government. The Public Finance Management (PFM) Act expounds on the Consolidated Fund.

All money raised or received by or on behalf of the national government, should be paid to the Consolidated Fund in Kenya, except money that (Article 206(1))-

  • is reasonably excluded from the Fund by an Act of Parliament and payable into another public fund established for a specific purpose; or
  • may, under an Act of Parliament, be retained by the State organ that received it for the purpose of defraying the expenses of the State organ (e.g. Appropriations in Aid).

The National Treasury in Kenya should administer the Consolidated Fund in accordance with Article 206 of the Constitution.

The National Treasury should maintain the Consolidated Fund in Kenya in an account to be known as the National Exchequer Account, kept at the Central Bank of Kenya. Subject to Article 206(1) of the Constitution, the National Treasury should—

  • facilitate payment into that account all money raised or received by or on behalf of the national government; and
  • pay from that National Exchequer Account without undue delay all amounts that are payable for public services.

The National Treasury should ensure that the National Exchequer Account is not overdrawn at any time.

Money can only be withdrawn from the Consolidated Fund-

  • in accordance with an appropriation by an Act of Parliament (Appropriation Act);
  • in accordance with Article 222 or 223 of the Constitution; or
  • as a charge against the Fund as authorised by the Constitution or an Act of Parliament.

“Appropriation” here means the authority granted by Parliament to pay money out of the Consolidated Fund or out of any other public fund. Article 222 contains provisions on expenditure before the annual budget is passed while Article 223 deals with supplementary budgets.

“Appropriation Act” means an Act of Parliament that provides for the provision of money to pay for the supply of services.

Money should not be withdrawn from the Consolidated Fund in Kenya unless the Controller of Budget has approved the withdrawal.

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 should make a requisition for the withdrawal and submit it to the Controller of Budget for approval.

The approval of withdrawal from the Consolidated Fund by the Controller of Budget, together with written instructions from the National Treasury requesting for the withdrawal should 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.

The National Treasury should also disburse the equitable share for county governments to the County Revenue Fund from the Consolidated Fund.

Taxes collected and loans received by the national government include the money that should be paid to the Consolidated Fund. Money that can be charged against the consolidated fund includes public debt.

For more about the Consolidated Fund, see Article 206 of the Kenyan Constitution and the PFM Act.

George Githinji
About George Githinji

I love writing content that is insightful and informative. The articles I write have a common #1 goal: Keeping it as simple as possible for users to understand the content. Read More

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